City Council
MEETING DATE: 7/13/2016
TITLE:
Title
Submission to the Voters of a Question Proposing an Amendment to Chapter 3.48 of the Municipal Code related to the Cannabis Tax
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FROM:
Charles P. McClendon, City Manager
Erica L. Vega, Assistant City Attorney
Tracey Martinez, Deputy City Clerk
RECOMMENDATION:
Recommendation
Staff recommends the City Council approve a Resolution Calling and Giving Notice of the Submission to the Voters of a Question proposing an amendment to Chapter 3.48 of the Cathedral City Municipal Code modifying the existing Medical Cannabis Business Tax to impose the tax on all cannabis businesses and to provide tax calculations for cultivation, manufacturing, dispensary and other businesses.
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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 "every 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 Council 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 ...
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