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Ad Hoc Cannabis Committee, in coordination with the Chief Administrative Office, recommending the Board:
1) Adopt and authorize the Chair to sign Resolution 140-2019 establishing the general tax rates for the unincorporated county for voter-approved general taxes for different commercial cannabis uses; and
2) Provide staff direction as to which department the commercial cannabis program, medicinal use personal cannabis program, and cannabis civil enforcement program should reside. (Est. Time: 45 Min.)
FUNDING: Commercial Cannabis Taxes - General Fund.
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DISCUSSION / BACKGROUND
Proposed Taxes Rates
Outdoor cultivation - $2 per square foot
Mixed light cultivation - $4 per square foot
Indoor cultivation - $7 per square foot
Nurseries - 4% on gross receipts
Manufacturing - Level 1 - 2.5% on gross receipts
Manufacturing - Level 2 - 0.0% on gross receipts
Retail - 4% on gross receipts
Distributor - 2% on gross receipts
Testing Laboratories - 0.5% on gross receipts
The cultivation, manufacturing, retail, and distribution rates were conservative estimates made by HdL. In addition, these rates fall within the median for the benchmark counties and cities or the other commercial cannabis jurisdictions in the Sacramento area. For nurseries and testing labs, HdL did not give estimated rates. The recommended rate for nurseries falls within the median of jurisdictions in the Sacramento area. The rate for testing laboratories is approximately 1.75% to 2% under the median for the benchmark counties and cities. The recommendation is being made due to different jurisdictions expressing difficulties in getting a testing laboratory to locate near them. This is a key part of the commercial cannabis process to make sure the product has been tested so the consumer knows the contents. The HdL estimated rate for distributors is a little less than the median for benchmark counties and cities (e.g. 0.25 % to 0.5%). Counties have said that it has been hard to have distr...
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