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CITY OF SAN LEANDRO <br />NOV 12 2019 <br />REHARBORS IDE <br />November 12, 2019 <br />The Honorable Mayor and City Council <br />City of San Leandro <br />835 E 1411 Street <br />San Leandro, CA 94577 <br />Re: Cannabis Tax Rates <br />Dear Mayor and City Council: <br />Harborside has a long history in the cannabis industry of California and was lucky enough to <br />celebrate its 131h anniversary today. We are proud to be one of the recipients of a dispensary <br />permit from the City of San Leandro and even more proud to be opening our store soon. <br />During our company's history, we have seen many changes in the cannabis industry, the most <br />recent of which has been many new cannabis businesses opening shop in jurisdictions that have <br />recently permitted cannabis operators. The result of this healthy and much needed competition is <br />that customers shop from store to store and from jurisdiction to jurisdiction often seeking lower <br />costs due to lower taxes. The compounded burden of state, local, cultivation, and sales taxes is a <br />35%+ increase in cost ultimately borne by consumers. <br />This dramatic cost increase all but forces customers to seek out jurisdictions with lower taxes, or <br />in the worst case, take their chances purchasing from unlicensed and illicit operators. Nearby <br />locales such as Emeryville, Berkeley, or San Francisco — all enjoy much lower tax rates: 3%, <br />5%, and 1.5%, respectively. Soon Alameda will have four dispensaries and 0% taxes. Cities like <br />these have proactively anticipated competition from other jurisdictions and from the illicit market <br />and set policies that supported these new businesses as they got on their feet. <br />Cannabis is still a nascent industry facing significant headwinds as the market develops and laws <br />and regulations mature. We hope that San Leandro will take the long view on this industry and <br />continue to craft smart policy that balances the needs of a growing industry with the needs of the <br />San Leandro community as a whole. <br />Sincerely, <br />(��a 41-,� <br />Conrad Gregory <br />Director of Government Relations <br />Harborside San Leandro <br />1965 Marina Blvd., San Leandro, CA 94577 <br />