City Council
MEETING DATE: 9/11/2018
TITLE:
Title
Update from the Cannabis Task Force
End
FROM:
Charles McClendon, City Manger
RECOMMENDATION:
Recommendation
This item is provided for information, discussion and direction only.
Body
BACKGROUND:
Section 5.88.140 of the Municipal Code established the Cannabis Task Force and prescribes the composition of its membership. The ordinance provides for the appointment of the task force by the City Manager. After an open application period, the appointments were made and were reported to the City Council on December 14, 2016. The task force met earlier this year on January 22, 2018 and a report was made to Council on February 6, 2018. As a result of the task force recommendation, a code amendment was subsequently processed allowing regulated on-site consumption at licensed dispensaries. No license amendments to allow consumption have been issued to date. The most recent meeting of the task force was held on July 30, 2018. Topics discussed were the tax on manufacturing and employee background checks.
DISCUSSION:
The task force spent a considerable amount of time discussing the tax on manufacturing. Cathedral City currently charges a tax of 40 cents per gram on all types of oils produced. Industry representatives pointed out that the different classes of product manufactured sell for widely divergent prices resulting in an effective tax rate that is much higher on crude oils, which sell for a lower price, than on distillates or boutique products selling for a higher price.
The following definitions of the different types of oils were provided by an industry representative on the task force:
Crude- Raw, un-refined extract oil usually very dark amber to yellow/blonde hue that still contains all fats, lipids, and waxes. Usually tests between 40-75% total cannabinoids.
Distillate- Winterized, filtered, and ultra-refined extract oil usually light amber to yellow/blonde in hue that contains no f...
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