Should Santa Rosa tax cannabis businesses to help offset the cost of regulating the fast-growing industry?
There is no formal opposition to the measure. Tawnie Logan, executive director of the Sonoma County Growers Alliance, said her group of cannabis growers supports the city’s plan.
“It’s a good framework that’s representative of a tax structure that’s more approachable for the industry,” Logan said. “It’s still a little high but it’s far more accessible than the rates proposed by the county.”
Cannabis businesses in the unincorporated areas of Sonoma County face much steeper taxes under a measure approved by county voters in March. It allows the county to tax cannabis businesses up to 10 percent and doesn’t lock in rate increments. Marijuana industry players, including the grower’s alliance, opposed the ballot measure, which passed by a 3-to-1 ratio.
Santa Rosa City Councilman Chris Rogers, a member of the council’s three-person cannabis policy subcommittee, said he believes the city’s measure strikes a balance between making sure the city can cover costs associated with the newly regulated local pot industry and “not setting the tax so high it gives people incentive to stay in the black market.”
Santa Rosa cultivators would initially be taxed at 2 percent of gross receipts or $5 per square foot of cultivation space. The starting rates for dispensaries would be 3 percent and it would be 1 percent for manufacturers.
These tax levels wouldn’t change for two years, and any subsequent increases would also be locked in place for two years. A supermajority of five votes on the seven-person City Council would be needed to increase the rates above 5 percent.
City officials have said the tax would allow it to address the impact of the cannabis industry while bolstering revenues for general city purposes.