To: Board of Supervisors
From: County Administrative Office
Agenda Section: Departmental
Vote Requirement: Majority
SUBJECT:
title
Options to Consider Related to Cannabis Cultivation Excise Tax
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RECOMMENDATION(S):
Recommendation
That the Board of Supervisors:
1. Consider reassessment of Measure S Cannabis Excise Tax rates for Tax Year 2025 (cultivation year 2024);
2. Confirm collection of taxes shall resume in November 2023 as previously directed;
3. Direct staff to return with an enforcement plan to address outstanding Excise Tax balances;
4. Provide direction as necessary.
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SOURCE OF FUNDING:
General Fund
DISCUSSION:
Over the past 2 years, the Board of Supervisors has taken several significant regulatory actions related to the local cannabis industry, and this item offers an update on those impacts and considerations for future actions.
Background
In February, 2022, the Board reduced the county's Measure S Cannabis Excise Tax by 85%.
In November, 2022 your Board:
* Temporarily suspended the tax for Tax Year 2023 (Cultivation Year 2022) and Tax Year 2024 (Cultivation Year 2023). Under this action, the next payments for normal cultivation taxes would be due in Tax Year 2025 (Cultivation Year 2024), with the first installment due by May of that year and second in October; and
* Deferred all outstanding payments until October 2023, with a waiver of penalty on installments due October 2022 and with enforcement occurring following payments due in October 2023 for any outstanding taxes owed.
In addition, on Jan. 24, 2023, your Board authorized cultivators to make partial payments for their cultivation taxes.
The tax was reduced, and payments and penalties later temporarily suspended because the cannabis industry was experiencing unsustainably low market pricing, an inability to sell existing cannabis inventory and concerns were expressed from cultivators that they would not survive current conditions without relief. The previously ...
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