The West Hollywood City Council will consider on Monday putting a proposal for a cannabis sales tax on the March 5, 2019 ballot.
The proposed 7.5% tax on recreational cannabis would boost the overall tax to 30% and is projected to raise $5.5 million year. A memo from City Hall says the money could be used to fund services “such as public safety, street repair, homeless services, pedestrian/bike safety, and parks …”
If approved by West Hollywood voters, that tax would be in addition to a 7.5% state sales tax and a 15% state excise tax. There is no sales tax levied on medical cannabis.
The City Hall memo states that the estimated $5.5 million in revenue “is based on approximately 18 adult-use cannabis businesses operating in the city which generate on average approximately $4,000,000 in gross receipts from adult-use cannabis sales each year; which would generate $72 million in gross receipts.
“The city will issue a total of 32 cannabis licenses for the sale of adult-use cannabis in some form (8 adult- use retail licenses, 8 consumption lounge (smoking, vaping, edibles) licenses, 8 consumption lounge (edibles only) licenses, and 8 delivery licenses). The city anticipates that some applicants may receive more than one type of license for a single location, which is why only 18 locations were estimated.”
Earlier this year the city engaged Fairbank, Maslin, Maullin, Metz & Associations to survey local residents as to their opinion of a city cannabis tax. When asked if they would support a 7.5% tax “to fund general municipal service such as Sheriffs, street repair, parks, and homeless services, until ended by voters and requiring annual independent financial audits” 75% of those responding said “yes” and 52% said “definitely yes.” Those responding “no” were 22% and those who said “definitely no” totaled 15%). Four percent were unsure.
A proposed 5% tax got less support, with 67% saying “yes” and 43% saying “definitely yes.” Those saying “no” were 26% and those saying “definitely no” equaled 18%.
When asked what they most supported using the money for, 82% said “ensuring safe and clean public areas,” 79% said “expanding city efforts to address homelessness,” and 77% said “repairing potholes.”
In order to be placed on the March 5 ballot, the City Council must approve the ballot measure in a vote of at least four to one. Approval will require a majority of city voters.
State and local taxes applied after the passage in November 2016 of Prop 64, which legalized recreational cannabis in California, have boosted the cost of cannabis significantly, leading some to worry that it will promote the illegal cannabis business.
The City Council meets at 6:30 p.m. Monday at the City Council Chambers, 625 N. San Vicente Blvd., south of Santa Monica. Parking is free in the five-story structure behind the Council Chambers with a ticket validated in the lobby.
Progressives. They love to take/tax my money!!!! I already give them so much, yet where does it all go?!?!?
Why are we picking on cannabis? Is the city trying to drive the businesses away? Are we regressing and making a moral judgment that this sin needs to be taxed? Are they suggesting that we can’t fix potholes with the funding from the city’s addiction to TOT? Can’t we have the clean sidewalks we were promised through the 33% rise in parking costs? This is simple foolishness.
If this goes through I will go back to the black market–which I actually considered doing after I was charged the already huge taxes on my last visit.
Some people commenting obviously can’t comprehend what they read. Medical marijuana is not taxed.
If the City Council wants to drive people back to the black market, go ahead and pass the tax. It will only hurt West Hollywood businesses.
I would suggest that alcohol is a bigger problem than marijuana and taxes on that should be raised. How many drunk drivers have we had kill people? How many marijuana-impaired people? How many people have died because of alcohol compared to marijuana? People like to blame marijuana for things but don’t blame alcohol. RAISE THE ALCOHOL TAXES!
Taxes on cannabis are already heavy and regressive (like all consumption taxes). Further taxation will only drive the black market and reduce the advantages of bringing this trade into the legal, above-board world.
I would suggest that the city raise taxes on alcohol by 10%-20% and leave the medical cannabis patients alone.
The drunks are passed out on Santa Monica Blvd. all day long. The cannabis users—even recreational—never cause problems like that.
Adding an additional 7.5% tax to the already overtaxed medical marijuana consumers is simply wrong. Would be great if it were possible to only tax the recreational users.