Measure to tax commercial cannabis businesses heads to November ballot

Posted at 10:45 PM, Apr 25, 2018
and last updated 2018-05-31 12:39:10-04

On June 5, voters will decide whether to place a local tax on commercial cannabis businesses in the unincorporated areas of San Luis Obispo County.  

Tax measure, B-18 was proposed by San Luis Obispo County Auditor-Controller, Jim Erb.  

“The purpose of the tax is to cover costs that are going to be associated with the recreational use of cannabis,” said Erb. 

It would place a 4% sales tax on gross receipts from cannabis businesses in unincorporated areas of San Luis Obispo County. 

 The proposed measure would increase 2% each year beginning in 2020, to a maximum of 10%. 

“I think every business that’s getting into the legal market is gonna have to deal with taxes in one way or another,” said Jason Kallen, Owner of City Boy Farms. 

Kallen says this is a good start for the cannabis community. 

“As far as the SLO County tax, I feel it’s one of the better taxes in the state. Obviously, we would prefer it to be zero or 2%, but if you have to take a tax, it’s not bad,” Kallen added. 

Megan Souza, Co-Owner of Megan’s Organic Market and Delivery Service says they’re strongly against the tax. 

“The more we tax cannabis, the more we are fueling the black market,” Souza said. “I just think it’s wrong to tax cannabis because we’re taxing medicine for people who need it, some of them to survive, others just to function.”

Erb does not agree. 

“It’s already there. It was there before the tax. When 70% is shipped out of state that’s the black market. I don’t think a 4% or 10% tax is what’s gonna drive people to the black market,” Erb said.

If approved, the tax would take effect on July 1. Cannabis testing facilities would be exempt from the tax. Erb says it would generate about $1.4 million the first year. It will pay for licensing enforcement and “unintended consequences” associated with the sale of cannabis.