The 2020 election is approaching, and a significant handful of local ballot measures may strengthen and expand the California cannabis industry. According to a recent article by Marijuana Business Daily, at least 26 local ballots will have pro-cannabis initiatives—and these initiatives could provide 150 new business permits for cannabis businesses across the state. Here is a brief overview of prospective changes.
Voters in many cities and counties throughout the state will be voting on measures that could expand the industry in various ways.
These cities and counties include:
- Banning (voting to allow distributors to operate in the city)
- Carson (voting to allow four new commercial operation centers)
- Commerce (voting on six new agreements between city officials and cannabis businesses)
- Costa Mesa (voting to allow commercial shops)
- Encinitas (voting to allow commercial cultivation, manufacturing, distribution, and four retail shops)
- Jurupa Valley (voting to allow seven new retailers and several changes to zoning laws)
- Laguna Woods (voting on whether to authorize retailers)
- La Habra (voting to authorize four new delivery services)
- Solana Beach (voting to allow two retailers and indoor cultivation and delivery)
- Sonoma (voting to remove licensing caps on all types of cannabis businesses)
- Ventura County (voting to allow commercial cultivation, processing, manufacturing, and distribution—not retail—in unincorporated areas)
- Yountville (voting to allow one retail operation)
Some will allow cannabis businesses to operate in areas that have previously banned them, while others will be expanding existing operations or allowing for additional licenses.
New and Adjusted Taxes
Most cities and counties with cannabis-related ballot measures are proposing tax adjustments. For many of these areas, new cannabis taxes are the first step to allowing commercial activities.
These tax proposals include the following:
- Distribution tax of up to 10% in Banning (where distributors have not yet been authorized)
- Cultivation tax structure in Calaveras County (per square foot of canopy rather than dry weight)
- Cannabis business tax of up to 10% in Calabasas (where marijuana businesses are currently prohibited)
- Cannabis retail tax of 4-7% in Costa Mesa (where retail has not yet been authorized)
- Measure C in Fairfield (general cannabis business tax of $10 per square foot of canopy, 6% for retailers’ gross receipts, and 4% for other types of licenses)
- General cannabis tax of 5% in Hawthorne (where marijuana businesses are currently prohibited)
- 6% tax on gross receipts in La Habra
- Cannabis business tax of 8% in Lemon Grove (where recreational businesses have not yet been authorized)
- Cannabis business tax of $10 per square foot for cultivators, 6% for retailers, and 4% for other types of businesses in Madera (where all marijuana business types are currently prohibited)
- 3% tax for all cannabis business types in Ojai
- Cannabis business tax in Porterville ($25 per square foot for cultivators or 10% of gross receipts)
- Cannabis business tax of 10% in San Bruno (where marijuana businesses have not yet been authorized)
- Annual fee for cultivators and 3.5-8% tax for all business types in San Joaquin County
- 1.25% recreational tax in Solana Beach (where all types of cannabis businesses are currently prohibited)
- Cannabis tax of 2-4% (depending on business type) in Sonoma
- Cultivation tax (depending on type of material) and 2.5% retail tax in Trinity County (where retailers are not yet authorized)
- Measure V, which would establish a 2-6% tax on gross receipts, depending in type of business, and varying fees depending on the type of cultivation in Vacaville (which has not yet authorized any type of marijuana business)
- 4-8% tax (depending on type of business) and $10 per square foot for cultivators in Ventura (where commercial cannabis is currently prohibited)
- 3% cannabis tax in Yountville (which has not yet authorized cannabis businesses)
Even if the measures don’t pass, the sheer number of proposals suggests that more areas are beginning to welcome cannabis businesses. We can expect this momentum to continue in the months and years to come, which may help counteract the legal and economic challenges the industry currently faces.
Personalized Counsel & Representation
At Purdy & Bailey, LLP, we provide a range of legal services for cannabis business owners. This industry faces more complex obstacles than other types of businesses, which is why you need nothing less than exemplary support. When you bring your case to our firm, we can help you build the legal and financial foundations your business needs to thrive.