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IN THE CITY COUNCIL OF THE CITY OF SAN LEANDRO RESOLUTION NO. 2020-018 RESOLUTION OF THE CITY OF SAN LEANDRO CITY COUNCIL TO MODIFY THE CURRENT CANNABIS BUSINESS GROSS RECEIPTS TAX OF 6% AND REPLACE IT WITH THE FOLLOWING SCHEDULE: 5% OF GROSS RECEIPTS FOR RETAIL CANNABIS BUSINESSES (I.E. DISPENSARIES); 3% OF GROSS RECEIPTS FOR CANNABIS MANUFACTURERS; 2% OF GROSS RECEIPTS FOR CANNABIS LABORATORIES AND DISTRIBUTORS WHEREAS, on November 8, 2016, San Leandro voters authorized Measure NN (the Cannabis Business Tax), which established a new gross receipts tax on cannabis businesses that could be established by the City Council at a rate of up to 10%; and WHEREAS, the results of the election were subsequently certified by the City Council on December 19, 2016; and WHEREAS, on March 20, 2017, the City Council adopted a resolution establishing a gross receipts tax of 6% that is currently set to increase to 7% on July 1, 2020; and WHEREAS, the City issued permits for three cannabis dispensaries, one cannabis manufacturing business, and one cannabis laboratory testing facility, consistent with the City's adopted cannabis regulatory ordinance and related San Leandro Zoning Code provisions; and WHEREAS, in the interest of ensuring the success of these new businesses and recognizing that these businesses have significant up -front capital and tenant improvement costs as well as other significant state and federal tax obligations, the City Council desires to modify the current tax rate schedule; and WHEREAS, the City Council recognizes that other communities in the region either adopted their own unique local cannabis tax rates, or chose not to implement such local taxes at all; the City Council also understands the importance of establishing local tax rates that will support the competitiveness of local San Leandro -based cannabis businesses; and WHERAS, based on these factors, the City Council desires to establish the following tax rate schedule, which would be applicable irrespective of whether the cannabis business is involved with medicinal or adult -use cannabis activity. NOW, THEREFORE, the City Council of the City of San Leandro does RESOLVE as follows: That said cannabis business tax rate is hereby set at: 5% of gross receipts for retail cannabis businesses (i.e. dispensaries); 3% of gross receipts for cannabis manufacturers; 2% of gross receipts for cannabis laboratories and distributors; and That the City Manager is authorized to take all actions reasonably necessary to implement the directive and intent of this Resolution. Introduced by Councilmember Cox and passed and adopted this 18`' day of February 2020, by the following vote: