Katelyn Baker
Well-Known Member
Watsonville - Ignoring recommendations from the ad hoc committee it convened in January, the Watsonville City Council voted 5-2 to adopt an ordinance that could impose significantly higher taxes for medical cannabis Tuesday.
If approved by the voters in November, the ordinance would generate tax revenues payable into the city's general fund on the following activities: $20 per square foot general tax on cultivated area; 2.5 percent tax on gross receipts from the sales of manufactured cannabis; and a tax on gross receipts from cannabis sales not to exceed 10 percent.
The decision was not without its critics, particularly members of the ad hoc Cannabis Advisory Committee and Mayor Felipe Hernandez, whom expressed concern that their recommendations had been ignored.
Clearly frustrated, Hernandez said he could not support the ordinance. City Councilman Lowell Hurst also voted no.
After April 27 and May 18 meetings to discuss taxation, the Cannabis Advisory Committee proposed a tax of $15 per square foot of grow area for cultivation uses, with the tax set at $12 to start; a 1 percent tax on gross receipts from the sales of manufactured cannabis; and a 6 percent tax on gross receipts from cannabis sales.
The committee, which included representatives from the cannabis industry, argued that the higher taxes would keep Watsonville from being a competitive market.
City Manager Charles Montoya said the city is not trying to gouge the industry with higher tax rates, instead the recommendations had been made in anticipation of the Adult Use of Marijuana Act, a statewide measure that would legalize recreational use of marijuana if passed this November.
The Adult Use of Marijuana Act, which would allow adults ages 21 and older to possess, transport and use up to an ounce of marijuana for recreational purposes and would allow individuals to grow as many as six plants, would significantly change the landscape of the cannabis industry, Montoya said.
As a result, Montoya urged the City Council to approve the ordinance as a placeholder to fill the two-year gap between November and March 2018, which is the next time they would have an opportunity to revisit the legislation, per the Cannabis Advisory Committee's recommendation.
"When medical cannabis changes to recreational cannabis, the business model for those who don't have it on the books will go down. I saw it happen in Colorado," said Montoya.
Montoya served as director of finance for the town of Castle Rock, Colorado, from 2008 to 2012, witnessing firsthand the changes that occurred when voters legalized marijuana for recreational use in that state.
After the vote, Santa Cruz County Cannabis Cultivation Choices Committee member Pat Malo said he wasn't discouraged by the decision.
"I'd like to see no taxation on medical cannabis, but at least this gets Watsonville to a place of access. When the Adult Use (of Marijuana Act) comes down it should shift the tax burden off of medical," Malo said.
The City Council also adopted a companion ordinance requesting an advisory vote on whether tax cannabis tax revenues should be used to deal with any effects of permitting cannabis cultivation, manufacturing and sales in Watsonville.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Watsonville Adopts Ordinance That Would Impose Cannabis Business Tax
Author: Ryan Masters
Contact: rmasters@santacruzsentinel.com
Photo Credit: Glen Stubbe
Website: Santa Cruz Sentinel
If approved by the voters in November, the ordinance would generate tax revenues payable into the city's general fund on the following activities: $20 per square foot general tax on cultivated area; 2.5 percent tax on gross receipts from the sales of manufactured cannabis; and a tax on gross receipts from cannabis sales not to exceed 10 percent.
The decision was not without its critics, particularly members of the ad hoc Cannabis Advisory Committee and Mayor Felipe Hernandez, whom expressed concern that their recommendations had been ignored.
Clearly frustrated, Hernandez said he could not support the ordinance. City Councilman Lowell Hurst also voted no.
After April 27 and May 18 meetings to discuss taxation, the Cannabis Advisory Committee proposed a tax of $15 per square foot of grow area for cultivation uses, with the tax set at $12 to start; a 1 percent tax on gross receipts from the sales of manufactured cannabis; and a 6 percent tax on gross receipts from cannabis sales.
The committee, which included representatives from the cannabis industry, argued that the higher taxes would keep Watsonville from being a competitive market.
City Manager Charles Montoya said the city is not trying to gouge the industry with higher tax rates, instead the recommendations had been made in anticipation of the Adult Use of Marijuana Act, a statewide measure that would legalize recreational use of marijuana if passed this November.
The Adult Use of Marijuana Act, which would allow adults ages 21 and older to possess, transport and use up to an ounce of marijuana for recreational purposes and would allow individuals to grow as many as six plants, would significantly change the landscape of the cannabis industry, Montoya said.
As a result, Montoya urged the City Council to approve the ordinance as a placeholder to fill the two-year gap between November and March 2018, which is the next time they would have an opportunity to revisit the legislation, per the Cannabis Advisory Committee's recommendation.
"When medical cannabis changes to recreational cannabis, the business model for those who don't have it on the books will go down. I saw it happen in Colorado," said Montoya.
Montoya served as director of finance for the town of Castle Rock, Colorado, from 2008 to 2012, witnessing firsthand the changes that occurred when voters legalized marijuana for recreational use in that state.
After the vote, Santa Cruz County Cannabis Cultivation Choices Committee member Pat Malo said he wasn't discouraged by the decision.
"I'd like to see no taxation on medical cannabis, but at least this gets Watsonville to a place of access. When the Adult Use (of Marijuana Act) comes down it should shift the tax burden off of medical," Malo said.
The City Council also adopted a companion ordinance requesting an advisory vote on whether tax cannabis tax revenues should be used to deal with any effects of permitting cannabis cultivation, manufacturing and sales in Watsonville.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Watsonville Adopts Ordinance That Would Impose Cannabis Business Tax
Author: Ryan Masters
Contact: rmasters@santacruzsentinel.com
Photo Credit: Glen Stubbe
Website: Santa Cruz Sentinel
