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City of San Leandro <br />Meeting Date: June 17, 2019 <br />Resolution - Council <br />Agenda Section:File Number:19-332 ACTION ITEMS <br />Agenda Number: <br />TO:City Council <br />FROM:Jeff Kay <br />City Manager <br />BY:City Council <br />FINANCE REVIEW:David Baum <br />Finance Director <br />TITLE:RESOLUTION of the City of San Leandro City Council to Maintain the Current <br />Cannabis Business Gross Receipts Tax of 6% until June 30, 2020, and to <br />Increase it to 7% on July 1, 2020, and to Increase to 8% on July 1, 2022. <br />WHEREAS, on November 8, 2016, San Leandro voters authorized Measure NN (the <br />Cannabis Business Tax), which established a new gross receipts tax on cannabis businesses <br />that could be established by the Council at a rate of up to 10%; and <br />WHEREAS, the results of this election were subsequently certified by the City Council on <br />December 19, 2016; and <br />WHEREAS, on March 20, 2017, the City Council adopted a resolution establishing a <br />gross receipts tax of 6% that is currently set to increase to 7% on July 1, 2019; and <br />WHEREAS, the City has now issued permits for three cannabis dispensaries, one <br />cannabis manufacturing business and one cannabis laboratory testing facility, consistent with the <br />City’s adopted cannabis regulatory ordinance and related San Leandro Zoning Code provisions; <br />and <br />WHEREAS, all of the above-referenced businesses are subject to the tax created by <br />Measure NN; and <br />WHEREAS, in the interests of ensuring the success of these new businesses and in <br />recognition of the fact that these businesses have significant up-front capital and tenant <br />improvement costs as well as other significant state and federal tax obligations, the City Council <br />desires to retain the current tax rate during the initial years of implementation of the City’s <br />cannabis business program, and then gradually increase the tax rate in subsequent years; and <br />WHEREAS, the City Council recognizes that other communities in the region have either <br />adopted their own unique local cannabis tax rates, or chosen not to implement such local taxes at <br />all, and also understands the importance of establishing local tax rates that will help support the <br />Page 1 City of San Leandro Printed on 6/12/2019 <br />250