Proposed Cannabis Business Tax

By Zach Friend, County Supervisor Second District

In the upcoming November election county voters will be asked to weigh in on whether our county should have a cannabis business tax. Over the last year the Board of Supervisors has worked with neighborhood groups, medical marijuana providers, patients and public safety on crafting policies surrounding the cultivation and dispensing of medical marijuana. The goals were to provide safe access but also mitigate environmental and neighborhood issues that have occurred with irresponsible cultivation and zoning difficulties from lack of regulations for dispensaries.

Throughout this process, the County and the local medical marijuana industry realized that these regulations proposed a unique set of challenges. Ensuring that environmental protections were maintained, neighborhood issues were resolved, and that only responsible medical marijuana businesses that operate within our local ordinances be allowed, would require additional County work. During the legislative discussions the local Association of Standardized Cannabis (collective of medical marijuana dispensaries) agreed that a cannabis business tax could provide funding to the County for these types of services.

The Board of Supervisors unanimously voted to place the Cannabis Business Tax on the upcoming November ballot. If approved, Measure K will levy a 7 percent tax specifically on local medical marijuana dispensaries. The Association of Standardized Cannabis, and many local medical marijuana supporters favor this tax as a way to help provide the County with new general revenues. The revenues can be used for General Fund purposes such as public health and safety, environmental protection and fire services. All revenue collected will stay local.

A number of other California communities, including Oakland and San Jose, have responded to the changing regulatory environment for the cultivation and dispensing of medical marijuana by approving a similar type of tax. The Santa Cruz County tax structure is modeled after a comparable tax in San Jose that has been shown to meet the balance of interests. The City of Santa Cruz will also have a tax on their November ballot, which mirrors the County’s proposal. If approved, this will provide a standardized dispensary tax in the county.

For quite some time Santa Cruz County voters have strongly supported state and local laws that provide for the compassionate and safe use of medicinal cannabis by prescription. During the local debate over cultivation and dispensary ordinances I heard from many that advocated the need to ensure safe access to medical marijuana as well as balancing environmental and neighborhood protection. As a result, our district will have a chance to vote on the Cannabis Business Tax in November (with absentee ballots coming out the beginning of October) to help balance these issues.

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As always, I’d love to hear your thoughts. Feel free to contact me at 454-2200.