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SAN FRANCISCO SUSPENDS CANNABIS TAX TO COMBAT ILLEGAL MARIJUANA SALES

SAN FRANCISCO SUSPENDS CANNABIS TAX TO COMBAT ILLEGAL MARIJUANA SALES
December 5, 2021 2 Comments
SAN FRANCISCO SUSPENDS CANNABIS TAX TO COMBAT ILLEGAL MARIJUANA SALES
SAN FRANCISCO SUSPENDS CANNABIS TAX TO COMBAT ILLEGAL MARIJUANA SALES

San Francisco suspends cannabis tax online cannabis news. An ordinance suspending San Francisco’s Cannabis Business Tax was unanimously approved by city supervisors ,Tuesday to help dispensaries compete with illegal drug dealers. San Francisco Supervisor Rafael Mandelman, the ordinance’s author, said in a statement suspending the business tax on cannabis will help support legal cannabis retailers as they struggle to compete with illegal cannabis sellers.

According to Supervisor Rafael Mandelman, the legislation’s author, suspending the city business tax through Dec. 31, 2022, would help support legal cannabis retailers as they struggle to compete with illegally sold cannabis in the cannabis communities.

Furthermore, San Francisco voters approved the tax in Nov. 2018, which imposes a 1 percent to 5 percent citywide tax on gross receipts from cannabis businesses. The tax is set to go into effect on Jan. 1, 2022.

Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers,” said Mandelman.“Sadly, the illegal market is flourishing by undercutting the prices of legal businesses, which is bad for our economy as illegal businesses pay no taxes while subjecting workers to dangerous conditions and consumers to dangerous products.,” Mandelman added. Now is not the time to impose a new tax on small businesses that are just getting established and trying to compete with illicit operators.”

Legal Cannabis dispensaries struggle to find financial support amid pandemic

Mandelman’s office attributted a December 2019 report from the California Legislative Analyst’s Office that found that increased state cannabis tax rates were directly linked to illegal cannabis sales, with a possible 10% increase to the State retail tax resulting in a 7-22% decrease in legal cannabis consumption.

In addition to the illegal sales, increased theft is also creating problems for cannabis retailers.

In 2016, State voters passed Proposition 64, legalizing adult cannabis use. Prop 64 established a 15% State excise tax on retail cannabis sales as well as a tax on cannabis cultivation.

Five years since the passage of the proposition, the State estimates that illegal market sales approach $8 billion annually in California — doubling the number of legal sales. The State is reporting close to 500 raids of illegal operations have been conducted this year.

Madelman’s further continued by saying “Cannabis businesses, along with many other retailers in San Francisco, are struggling under the weight of out-of-control retail theft,” . “San Francisco needs to do more to protect these businesses, their employees, and their customers before we hit them with a new tax.”

Cannabis dispensaries in San Francisco sees growth during the pandemic period.

Future plans to make sure the cannabis dispensaries witness further future growth.

Mandelman’s office says once legislation goes into effect, it will work with the City’s Controller, the Treasurer Tax Collector, the office of cannabis, and the cannabis oversight committee, to analyze data on cannabis business sales in San Francisco.

The group plans to present a set of recommendations on tax rate and provide structure to the Board of Supervisors to implement a new plan for 2023.

California’s cannabis taxes are smothering the legal market and allowing a dangerous, environmentally-destructive illegal market to flourish,” said Conor Johnston, co-owner of the City’s first social equity dispensary, Berner’s on Haight.

“ This is really impressive, a big Thank you to Supervisor Mandelman and his colleagues for doing what Sacramento and other legal cannabis communities has thus far failed to do – give legal cannabis businesses some room to breathe.” Category: cannabis news

2 Comments

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