Emeryville Ballot Measure S – Pros & Cons November 2018

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Gross Receipts Tax on Marijuana Businesses
50% + 1 required for passage

The way it is Now

The state of California authorizes businesses to grow, sell, and provide marijuana or cannabis for medicinal and recreational purposes. It charges an excise fee and also specifies the state tax rates that these businesses must collect from recreational users. Medicinal users with cards issued by the state’s Department of Public Health are exempt from state sales taxes. Cities may also add local business tax and a sales tax charged to customers. Cannabis sales tax rates range from 5 percent to 15 percent. In Oakland, the cannabis sales tax is 9.25 percent; in Berkeley and Richmond, 5 percent. Emeryville currently registers cannabis businesses and charges them a nominal 0.1 percent or $25—whichever is greater—on their gross receipts. Its general sales tax is 9.25%.

What Measure S would do if it Passes

Measure S would allow Emeryville to impose a business tax of up to 6 percent of gross receipts on all cannabis businesses within the City. The rate would be set by the City Council. The ballot description says the revenue generated would support regulation of the cannabis industry without taking money from essential City services. The proceeds from the tax would go to the general fund. The City could use them for any municipal purpose. The tax would be permanent; it would continue until repealed by the voters.

According to the City Attorney’s impartial analysis, S would be applied to the gross receipts of all categories of cannabis business, both for-profit and not-for-profit, but would not be charged to licensed medicinal users. Exactly how the gross receipts from recreational and medicinal users would be separated so that medicinal users would not be “charged” and other details would have to be defined by the City. The text of the proposed changes to the City ordinance is found in the full ballot language.*

Fiscal Effect

The City estimates that the tax will generate $2 million annually.

People for Measure S Say

• Measure S has been carefully crafted to ensure the City balances opportunities for new revenue against the sustainability and success of the emerging cannabis industry.
• Reasonable regulations paired with a fair tax structure will discourage illegal sales, help attract new local businesses, protect Emeryville consumers, and diversify the local economy.

No arguments have been filed in opposition to the measure.

*The League is researching the actual tax proposed.

To read the full measure, go to​ ​www.acvote.org/election-information/elections​ and click on Nov., then “Measures” and then desired ballot measure.

© League of Women Voters Berkeley Albany Emeryville 2018