File #: 19-331    Version: 1 Name: SR: Cannabis Business Tax Adjustment 2019
Type: Staff Report Status: Filed
In control: City Council
Meeting Date: 6/17/2019 Final action: 6/17/2019
Enactment date: Enactment #:
Title: Staff Report for a City of San Leandro City Council Resolution Maintaining the Current Cannabis Business Tax Rate at 6% of Gross Receipts Until June 30, 2020, and Increasing it to 7% of Gross Receipts on July 1, 2020 and 8% of Gross Receipts on July 1, 2022
Sponsors: City Council
Related files: 19-332
Title
Staff Report for a City of San Leandro City Council Resolution Maintaining the Current Cannabis Business Tax Rate at 6% of Gross Receipts Until June 30, 2020, and Increasing it to 7% of Gross Receipts on July 1, 2020 and 8% of Gross Receipts on July 1, 2022

Staffreport
SUMMARY AND RECOMMENDATIONS

Per the request of the City Council at the May 20, 2019 City Council meeting, City staff presents the attached resolution that would postpone by one year the previously established cannabis tax rate increase from 6% of gross receipts to 7% of gross receipts, which is currently set to take effect on July 1, 2019. If the proposed resolution is adopted, it would codify the following updated tax schedule, which would apply to any cannabis business, irrespective of whether it is associated with medicinal or adult use cannabis business activity in San Leandro:

* 6% of gross receipts through June 30, 2020
* 7% of gross receipts effective from July 1, 2020 through June 30, 2022
* 8% of gross receipts effective July 1, 2022


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 these election results on December 19, 2016. The provisions of the measure allow the City to impose a tax on all businesses located within the City that make use of any component or derivative of the cannabis plant, 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 $60,000 dispensary operating permit fee that is designed to recover the City's costs in regulating these businesses.

Prior to bringing Measure NN before the voters, City officials and staff declared during various public meetings and communit...

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