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Under the measure, cannabis businesses applying for the City’s business license would <br />be subject to the cannabis business license excise tax based on gross receipts. <br />Cannabis operations, whether existing, newly established, licensed, or unlicensed <br />would be required to pay the full tax imposed by the measure. However, payment of the <br />excise tax would not authorize the sale of marijuana by any illegal, unlicensed business. <br />The measure would provide the City the right to audit all books and records of the <br />cannabis operation, impose penalties and interest for failure to pay the tax, and provide <br />enforcement mechanisms for the City. <br />Using conservative estimates, if Phase 3 were implemented, the City could receive <br />approximately $200,000 in new revenues from the excise tax. If all four phases were <br />adopted (including allowing walk-in sales at delivery centers), the City could potentially <br />realize approximately $287,000 in total new annual revenues. Both estimates assume <br />application of a 5% cannabis tax from cannabis businesses in Redwood City. The <br />estimated revenues may be greater, depending on the level of business activity; <br />however, given current constraints on property availability, it is questionable whether a <br />significant number of cannabis businesses could locate in Redwood City. <br />ENVIRONMENTAL REVIEW <br />Two CEQA exemptions relate to the proposed ordinance. Allowances for indoor <br />nurseries are statutorily exempt from the requirements of CEQA (Bus. & Prof. Section <br />26055(h)) because they will require a Conditional Use Permit. This section states that <br />CEQA does not apply to the adoption of an ordinance, rule or regulation by a local <br />jurisdiction that requires discretionary review and approval of other permits or licenses. <br />To qualify for this exemption, environmental review must be performed as part of the <br />discretionary permit. <br />In addition, it can be seen with certainty that the proposed ordinance as it relates to <br />Delivery Centers without accessory retail does not have the potential to cause a <br />significant impact on the environment. Delivery centers are substantially similar to <br />warehousing and distribution centers that are currently permitted by right in these <br />zoning districts. Any potential impacts, including traffic, water, energy or air pollution are <br />substantially similar to what is currently permitted by right. <br /> <br /> <br />CATHERINE RALSTON <br />ECONOMIC DEVELOPMENT MANAGER <br /> <br /> <br />7.B. - Page 13