Modesto CA Moves Closer Toward Taxing Marijuana Businesses

Modesto officials Tuesday will continue their discussion about putting a marijuana tax on the November ballot.

The City Council will consider a proposed cannabis business tax of as much as 10 percent on companies’ gross revenues. The tax would apply to medical and nonmedical marijuana businesses.

The measure would be a general tax, which requires a simple majority to pass, and it could be spent on any government purpose. The city’s tax consultant estimates the tax could bring in $1 million annually.

Council members could vote at their June 27 meeting to place the tax on the ballot. A city report says it would take five votes from the seven-member council to do so.

Modesto is looking at a tax even though the council has not yet decided whether to allow marijuana businesses. But city officials have said the next time a general tax could be put on the ballot would be November 2019.

“The city currently prohibits cannabis businesses …,” according to the report. “Placing the Cannabis Business Tax on the ballot does not change this, but would allow the city to have a tax available for implementation should these businesses be allowed at a later date.”

The city is looking at taxes and regulations after California voters approved Proposition 64, the Adult Use of Marijuana Act, last November.

The act allows for commercial activities, including cultivation, manufacturing and distribution, as well as retail sales. But these activities won’t be legal without a state license. Officials have said California expects to issue licenses in January, but local governments can ban or regulate commercial activities.

The council formed a committee — which includes staff, Mayor Ted Brandvold and council members Jenny Kenoyer and Mani Grewal — on May 9 to come up with the ballot measure that will be discussed Tuesday. The committee is expected to present its final recommendation to the council June 27.

The recommendation could be modified based on the results of a survey of 400 city voters. Modesto hired Godbe Research at a cost not to exceed $27,000 to conduct the survey “to deconstruct the language of the ballot measure and inform the City Council on community opinions about a potential tax,” according to the report.

The council meets at 5:30 p.m. in the basement chambers of Tenth Street Place, 1010 10th St.


Link – Modesto Bee

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Marijuana Retail Report, is a national daily online trade publication serving retailers of marijuana products and accessories. News and information are geared strictly to select retail channels, with distribution limited to licensed collectives, recreational retailers, accessories retailers, and wholesalers.


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