City Council
MEETING DATE: 6/29/2016
TITLE:
Title
Amendments to Medical Cannabis Tax
End
FROM:
Charles P. McClendon, City Manager
Erica L. Vega, Assistant City Attorney
RECOMMENDATION:
Recommendation
Provide direction to staff regarding proposed amendments to medical cannabis tax
Body
BACKGROUND:
The voters of the City of Cathedral City approved Ordinance No. 742 imposing a tax on medical marijuana in November 2014. The tax approved by the voters requires "[e]very person engaged in operating or otherwise conducting a cannabis or marijuana collective and/or dispensary" to pay a 15% tax on gross receipts. The tax is codified in Chapter 3.48 of the Code. The City Council is authorized to levy the tax at a lower rate, and in August 2015 adopted Resolution 2015-50 reducing the rate to 10%. Earlier this year, the City Council adopted Ordinance 775, which amended Chapter 3.48 to include additional administrative procedures, clarify the meaning of "gross receipts," and revise terminology for consistency purposes.
At the time Ordinance No. 742 was approved by the voters, dispensaries were the only medical cannabis uses permitted in the City. Now, the City allows cultivation and manufacturing activity as well. As such, the Council directed staff to explore whether the tax should be amended to tax cultivation and manufacturing activity differently than dispensaries. On May 11, 2016, the City Council held a study session on this issue and directed staff to bring back for a study session proposed language amending Chapter 3.48 to tax cultivation and manufacturing on a basis other than gross receipts, and to suggest any other desirable amendments to the tax.
DISCUSSION:
As discussed at the May 11th study session, Vicente Sederberg has suggested that the City amend Chapter 3.48 to tax cultivation based on the square footage of the cultivation site, and to tax manufacturing based on the weight of cannabis concentrate produced and a flat per unit ...
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