Guadalupe voters will decide in November whether to allow the city to establish a tax rate on cannabis businesses.
The proposed measure would change how the city collects revenue from local cannabis businesses and could generate an estimated $80,000 annually, according to Guadalupe City Administrator David Trujillo.
Currently, cannabis businesses pay into the city's Community Benefit Fund based on their gross earnings.
Trujillo said the proposed cannabis tax would provide a more direct and transparent way to collect that revenue.
“Right now, the current setup, they’re taking it out of their gross earnings, and then they’re distributing it back to the city,” Trujillo said. “They don’t get to push that onto the consumer.”
If approved, the city could set a tax of up to 8% for retail cannabis businesses and up to 4% for other cannabis businesses.
Trujillo says dispensaries currently pay a combination of charges, including a charitable contribution and other fees.
“The dispensaries are paying 7.5% or something like that, with a 1% charitable contribution and then about 6% in general,” Trujillo said.
Austen Connella, CEO of Root One, said the proposed tax could make it clearer to customers how much of their purchase is going toward the city.
“It’s going to allow more transparency to the customer,” Connella said. “The community benefits are kind of based in our pricing schedule. We’ll be able to kind of separate that and identify how much each sale is going into the city.”
At Central Coast Processing, CEO Rick Fisher said there is support for the measure but expressed concerns about the potential long-term impact on cannabis businesses.
“Our concern really relates to our ability to maintain our business and stay in business,” Fisher said. “Other municipalities have lower tax rates.”
Trujillo said the city expects the proposed tax to generate close to $80,000 a year. He said the revenue could be used for community investments, including parks, infrastructure and public safety.
Some residents also expressed concerns about the potential cost to consumers.
Guadalupe resident Nathan Mamaligsa said additional costs could add up for people who already spend money on cannabis products.
“As a consumer, we’re already spending so much money,” Mamaligsa said. “So I feel like after a while it’s going to stack up, you know.”
If approved by voters, the measure could take effect in January 2027.
