Title
Staff Report for City of San Leandro City Council Resolution Authorizing a Consulting Services Agreement with MuniServices/Avenu Insights & Analytics for Annual Cannabis Business Audit Services and Associated Appropriation of $102,000 from the General Fund Unrestricted Fund Balance to be Paid for by Annual Operating Permit Fees
Staffreport
SUMMARY AND RECOMMENDATIONS
Staff recommends the City Council approve the proposed resolution authorizing the City Manager to execute an agreement with MuniServices/Avenu Insights & Analytics for Cannabis Business Audit Services and approval of an associated appropriation of $102,000 from the General Fund Unrestricted Fund Balance to be Paid for by Annual Cannabis Dispensary Permit Fees.
BACKGROUND
In November 2016, Measure NN (the "Cannabis Business Tax") was approved by a majority of San Leandro voters, enacting new cannabis business tax provisions as part of Chapter 2-21 of the Municipal Code. The City Council subsequently certified the election results on December 19, 2016. The measure permits the City to impose a gross receipts tax on all businesses located within the City that use the cannabis plant as part of their business model, at a maximum rate of 10% of annual gross receipts. Measure NN does not legalize or otherwise permit cannabis businesses in San Leandro and the cannabis business tax is in addition to the cost of an annual business license, as well as the annual $35,000 dispensary operating permit fee that is imposed to recover the City's costs in regulating cannabis dispensary businesses.
Prior to bringing Measure NN before the voters, City officials and staff declared during various public meetings and community events that the intention of the "up to 10%" language of the tax measure was meant to provide flexibility in the rate at which the tax would be imposed. Factors supporting such flexibility include:
* ensuring that local cannabis businesses maintain their competitiveness with other busin...
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