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City of San Leandro <br />Meeting Date: February 18, 2020 <br />Resolution - Council <br />Agenda Section:File Number:20-060 ACTION ITEMS <br />Agenda Number: <br />TO:City Council <br />FROM:Jeff Kay <br />City Manager <br />BY:Jeff Kay <br />City Manager <br />FINANCE REVIEW:Liz Warmerdam <br />Interim Finance Director <br />TITLE:RESOLUTION of the City of San Leandro City Council to Modify the Current <br />Cannabis Business Gross Receipts Tax of 6% and replace it with the following <br />schedule: 5% of gross receipts for retail cannabis businesses (i.e. dispensaries); <br />3% of gross receipts for cannabis manufacturers; 2% of gross receipts for <br />cannabis laboratories and distributors <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 City Council at a rate of up to 10%; and <br />WHEREAS, the results of the 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, 2020; and <br />WHEREAS, the City issued permits for three cannabis dispensaries, one cannabis <br />manufacturing business, and one cannabis laboratory testing facility, consistent with the City’s <br />adopted cannabis regulatory ordinance and related San Leandro Zoning Code provisions; and <br />WHEREAS, in the interest of ensuring the success of these new businesses and <br />recognizing that these businesses have significant up-front capital and tenant improvement costs <br />as well as other significant state and federal tax obligations, the City Council desires to modify the <br />current tax rate schedule; and <br />WHEREAS, the City Council recognizes that other communities in the region either <br />adopted their own unique local cannabis tax rates, or chose not to implement such local taxes at <br />all; the City Council also understands the importance of establishing local tax rates that will <br />support the competitiveness of local San Leandro-based cannabis businesses; and <br />Page 1 City of San Leandro Printed on 2/12/2020 <br />87