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8.A. - Page 11 <br />2. Phase 11— Delivery Registration (Est. $5,000/year) <br />The main revenue from this phase would come from the business license taxes <br />paid by businesses delivering to Redwood City. City staff does not know at this <br />time exactly how many businesses are delivering to the City, but staff made an <br />estimate based on 48 cannabis delivery businesses that are located within 50 <br />miles of the City. If at least 50% of those businesses delivered here and obtained <br />their business license, the City could receive approximately $5,000 per year. <br />Since the businesses delivering would all be located outside of the City in this <br />phase, there would not be any anticipated tax revenues based on gross receipts. <br />3. Phase 111— Delivery Only Retail (Est. $120,000/year) <br />In this phase, the City would begin to see revenue from the sales tax charged on <br />purchases of adult use cannabis. In addition, if the voters approved a cannabis <br />tax, the City would begin to see revenues from this tax. If the City implemented a <br />possible cannabis tax of 5%, the City could receive approximately $100,000 in <br />annual revenues based on the estimated gross receipts. This is in addition to an <br />estimated $20,000 in sales tax revenue. This phase offers the potential of <br />$120,000 in new revenue. <br />4. Phase IV - Storefront Retail (Est. $162,000/year) <br />In this final phase, the City would see both sales tax and cannabis tax revenues <br />increase since a storefront retail operation is expected to have higher gross <br />receipts than a delivery -only facility. The following estimated revenues are based <br />solely on new revenues associated with storefront retail and do not include the <br />revenues the City could realize in Phases II and III. As before, given a possible <br />cannabis tax of 5%, the City could receive $135,000 in additional revenues <br />based on the estimated gross receipts. The potential new sales tax revenue for <br />this phase would be $27,000. Overall, this phase offers the potential of $162,000 <br />in new revenue. <br />The below chart illustrates the cumulative revenue potential of each phase: <br />Cannabis Annual Revenue Potential <br />Phase Estimated Revenue <br />Phase 1 $ 0 <br />Phase II $ 5,000 <br />Phase III $ 120,000 <br />Phase IV $ 162,000 <br />Total $ 287,000 <br />11 <br />