City Council
MEETING DATE: 1/25/2017
TITLE:
Title
Discussion on Tax Rates for Cannabis Cultivation and Manufacturing Businesses
End
FROM:
Charlie McClendon, City Manager
RECOMMENDATION:
Recommendation
This item is presented for information, discussion and direction only.
Body
BACKGROUND:
The voters of the Cathedral City approved Measure N at the November 4, 2014 general municipal election. Measure N authorizes the City to impose a tax on the proceeds of cannabis and marijuana collectives as defined in the Ordinance in the amount of fifteen cents (15) for every dollar of proceeds. The Ordinance provides the Council with the authority to set the tax at a rate that is less than 15% and to establish exemptions, incentives, or other reductions, and penalties and interest charges or assessments for failure to pay the tax in a timely manner. On August 26, 2015 Council approved Resolution 2015-50 setting the tax rate on dispensaries at 10% of gross proceeds.
At the November 8, 2016 general election the voters of Cathedral City approved Measure P. The ballot language for Measure P stated "To help fund municipal services, including police protection and crime suppression services, fire prevention and suppression services, emergency medical services, park, recreation, and library facilities and services, shall an ordinance amending the existing cannabis tax be adopted that would expand the tax to apply to recreational cannabis, if legalized, and apply a tax of $25 per square foot of cultivation space, and $1.00 for every gram of cannabis concentrate and every unit of cannabis-infused product?"
DISCUSSION:
Council has flexibility in establishing tax rates for cultivation and manufacturing operations up to the maximum rates approved by the voters.
Palm Springs currently taxes cannabis businesses at the rate of 10% of gross proceeds for dispensaries. They have not to date permitted any cultivation operations not associated with a dispensary although...
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