AgdaPkt 2018-07-23 Joint SA PFA - Laserfiche WebLink

Browse Search

6A.D. - Page 3 Including initial tax rates for these cannabis business activities avoids the need to return to the voters if such activities are approved by the City Council in the future. The proposed ordinance allows the City Council to adjust the rates up or down subject to the maximum rate of 10% of gross receipts by resolution or ordinance. City staff plans to report on revenues generated by cannabis businesses in the first year and annually after that. Setting a rate for multiple years provides greater certainty to the industry and will allow for the collection of data and information to inform the Council for any potential rate changes in the future. The proposed measure give the City Council the discretion to set different tax rates for cannabis businesses within the supply chain. According to the City's consultant, charging a uniform rate for all businesses would restrict the industry in the City because there are different profit margins and levels of competition for each type of commercial cannabis operation. Additionally, the cumulative tax rate of all state and local cannabis taxes should stay under 30%, based on the current market. Otherwise, the total tax rate may make legal cannabis financially uncompetitive with illegal cannabis, defeating the purpose of ending black market activity and replacing it with regulated business activity. Public Opinion Research Polling In order to gain an understanding of the opinions of Redwood City voters and gauge voter support for a potential cannabis revenue measure, the City retained the services of a professional polling firm, EMC Research. EMC conducted a statistically reliable and scientifically valid poll on behalf of the City to aid in determining the feasibility of a cannabis revenue measure for the November 2018 ballot. The Poll was conducted in June 2018. The Poll included a question about voter willingness to support a potential cannabis tax measure. The results of the recent poll indicated support, beyond the margin of error, for a general purpose cannabis tax measure. This measure would require a majority vote to pass. Cannabis Business Tax for Unrestricted General Revenue Purposes The cannabis business tax would be for unrestricted general revenue purposes and could be used for any valid governmental purpose. The cannabis business tax is separate from the City's cannabis operator permit fees, which cover the City's costs for regulating cannabis business activity, including funding a drug education and prevention program. Those fees are set by the City Council and do not require voter approval. Text of Proposed Ballot Question