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November 6, 2018 — California General Election
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— Cannabis Business TaxOrdinance —

Local
November 6, 2018 —California General Election

City of San Luis Obispo
Measure F-18 Ordinance - Majority Approval Required

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Election Results

Passed

9,055 votes yes (79.57%)

2,325 votes no (20.43%)

  • 100% of precincts reporting (26/26).
  • 12,106 ballots counted.

Shall the measure to maintain and improve essential City services, including without limitation: police/fire services; senior, youth and park services; programs to retain/attract local jobs; addressing homelessness; and other general revenue purposes; by establishing a cannabis business tax up to 10% of gross receipts for retail and businesses and up to $10.00 per canopy square foot for cultivation, raising approximately $1,500,000 annually, until ended by voters, with all funds used locally, be adopted?

Impartial analysis / Proposal

Measure F-18 is a cannabis business tax measure placed on the ballot by unanimous vote of the San Luis Obispo City Council. If approved by a majority of City voters, the Measure would enact a tax charged upon persons engaging in commercial cannabis cultivation, retail sales, and other cannabis business activities. Under current City law, all commercial cannabis activities are prohibited within the City, personal cultivation is limited, and there is no City tax specifically applicable to cannabis businesses. The proposed tax would apply only to cannabis businesses.

The City Council previously adopted Ordinance No. 1647 (2018 Series) to permit and regulate commercial cannabis businesses. However, that ordinance provides that no permits shall be issued, and no commercial cannabis business operations shall be allowed in the City, unless City voters approve a cannabis business tax.

This Measure provides that "The Cannabis Business Tax is a general tax enacted solely to raise revenue for general governmental purposes... ", meaning that all revenue from the tax can be used for any City projects, services or operations, without limitation. Revenues from the Measure would be deposited into the City's general fund with expenditures determined by the City Council.

Measure F-18 would approve an ordinance to be codified as Chapter 5.10 of the City's Municipal Code to define cannabis businesses and activities subject to the tax; establish administration, payment and compliance procedures; and impose the tax on commercial cultivation and cannabis business activities. The Measure would impose a tax not to exceed $10 per square foot of plant canopy grown on commercial cannabis cultivation and not to exceed 10% of gross receipts on retail sales. Taxes would also be imposed on testing labs, manufacturing, processing and distribution businesses at maximum rates between 2.5% and 4% of gross receipts. Uncompensated personal cultivation consistent with State and City law would not be taxed. The Measure provides for a phased imposition of taxes on all cannabis businesses, establishing initial rates, beginning January 1, 2019, below the authorized maximum rates. The initial rate for commercial cultivation is fixed through January 1, 2021. After January 1, 2022, the maximum commercial cultivation tax rate will increase based on a specified Consumer Price Index. For all other cannabis business types, the City Council can, by resolution or ordinance, raise rates up to the specified maximums for the business type at any time after January 1, 2019. The Measure authorizes the Council to eliminate taxes or reduce tax rates at any time. The tax cannot be increased above the maximum amounts specified without additional voter approval.

A "yes" vote on Measure F-18 means the City will be authorized to impose and collect the tax and the City will begin permitting cannabis businesses that comply with State and City laws after January 1, 2019. A "no" vote means that the City will not be authorized to impose and collect the tax and the City will not permit or allow any cannabis business operations in the City.

— J. Christine Dietrick, City Attorney, City of San Luis Obispo

YES vote means

A "yes" vote on Measure F-18 means the City will be authorized to impose and collect the tax and the City will begin permitting cannabis businesses that comply with State and City laws after January 1, 2019.

NO vote means

 A "no" vote means that the City will not be authorized to impose and collect the tax and the City will not permit or allow any cannabis business operations in the City.

Arguments FOR

With the passage of Proposition 64, which legalized adult-use cannabis, local governments were given the responsibility to provide oversight and regulate the legalization of cannabis business within their communities.

In the City of San Luis Obispo, Proposition 64 passed by 67%, indicating our community’s support for bringing adult-use cannabis out of the shadows and into a regulated, safety-focused business for those who choose to participate. Establishing a tax on the cultivation, production and sale of cannabis is a common-sense component of any such regulation.

Earlier this year, after a robust public process, the City Council unanimously adopted an ordinance that allows the City to ensure public safety while overseeing this growing industry. To prioritize safety and visibility, the local ordinance will create buffer zones around schools, parks and residential neighborhoods, and establish limits on locations and size. The ordinance to legalize cannabis businesses will not take effect unless and until this tax proposal is approved by the voters of San Luis Obispo.

The tax is an important part of the City’s ongoing commitment to fiscal responsibility. It was carefully crafted with input from stakeholders in public forums to find the right balance between generating the revenue needed while addressing certainty for this emerging industry. Funds collected will be directed toward priorities set by residents such as maintaining long-term financial health, supporting police and fire services, maintaining parks and open space, retaining local jobs, and addressing homelessness.

Measure F-18 will provide additional funding to support the quality of life for our residents and our city. Please join your entire City Council and vote YES on Measure F-18.

s/ Dan Rivoire, Council Member

s/ Andy Pease, Council Member

 

 

 

 

 

 

Arguments AGAINST

NO ARGUMENT AGAINST MEASURE F-18 SUBMITTED

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