10A Action 2019 0617 - Laserfiche WebLink

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File Number: 19-331 Prior to bringing Measure NN before the voters, City officials and staff declared during various public meetings and community events that the intention of the “up to 10%” language of the tax measure was meant to provide flexibility in the rate at which the tax would be imposed. Factors supporting such flexibility include: ·ensuring that local cannabis businesses maintain their competiveness with other businesses operating in neighboring communities; ·recognition of the significant up-front costs associated with starting up a cannabis business; and ·ensuring that the cumulative federal, state, and local taxes imposed on such businesses would not serve to further incentivize the unregulated market. Regional Context Below is a list of the cannabis tax rates currently imposed in neighboring Bay Area communities, based on online research: City of Alameda 0% Berkeley 2.5% of gross receipts (medicinal) 5% of gross receipts (adult use) Emeryville 3% of gross receipts (retail dispensaries and delivery) 2% of gross receipts (manufacturing) 1% of gross receipts (distribution & laboratory testing) Hayward Up to 15% of gross receipts Oakland 0.12% of gross receipts (businesses with revenue < $500K/year) 5% (medicinal), 10% (adult-use) [businesses exceeding $500K/year] San Francisco 5% of gross receipts (retail businesses w/ revenue >$1M/year) 2.5% of gross receipts (retail business with revenue <$1M/year) 1.5% of gross receipts (non-retail >$1M/year) 1% of gross receipts (non-retail< $1M/year) San Jose 10% of gross receipts Santa Rosa 3% of gross receipts Alameda County 0% (applies to unincorporated areas) All three of San Leandro’s permitted dispensary operators currently do business in jurisdictions referenced above that impose local gross receipts taxes. Additionally, each of San Leandro’s three dispensary teams previously offered to provide voluntary gross receipts contributions to the Page 2 City of San Leandro Printed on 6/12/2019 247