A measure on the November ballot will ask San Pablo voters if they support a tax on marijuana businesses. If it passes, Measure M would prompt local lawmakers to begin the process of permitting cannabis businesses, which are currently illegal.
Several neighboring cities, including Richmond and El Cerrito, have passed similar measures and adopted ordinances allowing cannabis businesses.
If Measure M passes, it will amend San Pablo’s business license tax ordinance to include an additional tax of up to 7% of the total revenue of future cannabis businesses. However, the city plans to begin with a 5% tax.
This initiative comes eight years after California legalized recreational marijuana use for adults. The state currently levies a 15% excise tax on marijuana, while local taxes across California range from 0 to 15%. Richmond, for example, has a 5% tax on cannabis businesses. Measure M would add a layer of taxation to San Pablo cannabis businesses on top of the state tax. San Pablo officials estimate the tax could generate $1.5 million to $2.2 million annually for the city’s general fund.
“Once it does pass, the council would be adopting a regulatory ordinance and an operating permit after Nov. 5 to regulate these specific types of businesses in San Pablo,” City Manager Matt Rodriguez said.
Wishful thinking?
Initially, the council plans to approve the operation of three cannabis commercial retail businesses — also known as dispensaries — which Rodriguez said is the maximum amount based on geographic constraints set by the state. The city would not permit other types of cannabis businesses, like cultivation and manufacturing, at this time, Rodriguez said.
Robin Goldstein, director of the Cannabis Economics Group at UC Davis and co-author of “Can Legal Weed Win? The Blunt Realities of Cannabis Economics,” said that based on the average revenue of California cannabis retail businesses, San Pablo’s revenue predictions seem up to four times higher than Goldstein would expect.
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San Pablo voters will decide if cannabis businesses can set up shop
