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MEASURE "A" COMMERCIAL CANNABIS BUSINESS TAX

SPECIAL ELECTION – CITY OF SHASTA LAKE


Frequently Asked Questions:

1. What is the Commercial Cannabis Business Tax?
Measure A continues and clarifies a tax on commercial cannabis businesses operating within the City of Shasta Lake. Effective January 1, 2018, the following commercial cannabis businesses will be allowed: indoor cultivation, mixed-light cultivation, non-volatile manufacturing, retail, distribution, testing and nurseries.

Cities and Counties throughout California that allow Cannabis activities are imposing some type of taxation on Cannabis businesses.  Click here for a list of taxes imposed in other Cities and Counties.

2. What are the goals of Measure A?
  • Continue comprehensive regulations that preserve the health and safety of our community.
  • Establish a new source of funding that benefits the entire community.
  • Create a reasonable tax structure that supports financially stable cannabis businesses.
  • Continue to provide access to medical cannabis for those who benefit from its use.
  • Reduce and eliminate the black market for cannabis.

3. What are the proposed RATES?  
Measure A would have a lower tax rate than the maximum square foot tax listed in the ordinance.  The maximum allowable tax rate of up to $26 per square on indoor cultivation area, up to $18 per square foot on mixed-light cultivation area, up to $10 per square foot of indoor cultivation area, up to $25 per square foot of non-volatile manufacturing area, and up to 12% gross receipts on cannabis retail, distribution, testing and nurseries.

Proposed rates: as mentioned above the actual taxes imposed for all commercial cannabis businesses will be at reduced rates shown in the tables below, unless modified by a vote of the City Council.

Commercial cannabis business tax on commercial cannabis cultivation is to be initially imposed as follows:

 

Commercial Cultivation

Tax Rate Period

Rate per s/f

All activities

 

  Jan. 2018 to June 2018

$1.00

  July 1, 2018 to June 30, 2019

$1.00

  July 1, 2019 to June 30, 2020

$2.00

  July 1, 2020 to June 30, 2021

$3.00

  July 1, 2021 to June 30, 2022

$4.00

  July 1, 2022 forward

$5.00

















Tax on Commercial Cannabis Manufacturing is as follows:

Manufacturing

Rate per s/f

Manufacturing

$7.00

  



Other Commercial Cannabis Business is as follows:

Other Commercial Cannabis

Operator

Percentage of Gross Receipts

Cannabis Nursery

3%

Dispensary

6%

Distributor

3%

Testing Laboratory

0%

Transporter

0%












4. Is there an existing cannabis tax?

In 2014, the City of Shasta Lake voters approved Measure C with 73.18% support, which placed a 6% gross receipts tax on cannabis dispensaries. On average, Measure C has brought in $400,000+ revenue on an annual basis. However, with then passage of Prop 64 additional commercial cannabis business types are now allowed in California for both medical and recreational cannabis. Measure A would repeal Measure C and extend the cannabis taxation to include all approved commercial cannabis business operations within the City of Shasta Lake.

5. What will the funds be used for?
All the proceeds from Measure A will be used to fund local law enforcement and code enforcement within the City of Shasta Lake and would be used for no other purpose.

6. Can the tax rates be adjusted?
The City Council may adjust any tax rate (lower or higher); however, the tax rates cannot exceed the maximum tax rates listed in Measure A without voter approval. This flexibility gives the City Council the ability to establish a reasonable tax structure as the market price for cannabis fluctuates to ensure financially stable cannabis businesses within the City to remain competitive.

7. How do I vote?
You must be a registered voter within the City of Shasta Lake to vote on this measure. Vote-by-mail ballots must be postmarked or delivered the Shasta County Elections Office, an Official Ballot Drop-Off Box, or any polling place in Shasta County on Election Day, August 29th. Registered voters may vote early in person at the Shasta county Elections Office located at 1643 Market St, Redding, CA 96001. Polling Places will be open on August 29, from 7am to 8pm. For more information regarding voting, please contact the Elections Office at 530-225-5730.

For any additional information or questions regarding Measure A, please contact the City of Shasta Lake, City Clerk at 530-275-7407.


History of Measure "A"

With the City’s ongoing development of a comprehensive regulatory ordinance, a new tax ordinance is being proposed that would replace Measure C and apply a tax on all commercial cannabis businesses as allowed by the passage of Proposition 64.

Municipal Code Chapter 3.17 - MARIJUANA COLLECTIVE/COOPERATIVE BUSINESS TAX - Pending update, will be updated by December 2017.  Contact City Clerk, for full tax Ordinance and any Revisions.  

Shasta County does not have a regularly scheduled general election until November 2018. Waiting to call an election until the next regularly scheduled general election, would forego the opportunity to devote a projected range of $200,000 to $400,000 in first-year revenues to local law enforcement and code enforcement activities.  The City decided to move forward call for a special election on August 29, 2017, rather than wait until November 2018.   

Below are resolutions and ordinances related to the proposed tax measure:

City Council Regular Meeting 03/21/2017 (Video & Staff Report)
Resolution calling for a Special Election and a Measure to adopt an Ordinance imposing a Special Tax for Local Law Enforcement Funding.  Resolution for approval of a supplemental appropriation.
Passed 5-0 03/21/2017

City Council Regular Meeting 04/18/2017 (Staff Report)
Action to revise Section 5 of Resolution CC-17- 23 calling for a special municipal
election to be held on Tuesday, August 29, 2017 to present to the voters the
Ordinance replacing Chapter 3.17 to the Municipal Code, to impose a special tax
on commercial cannabis businesses to fund local law enforcement/code
enforcement.
City Council Moves Approval 4-0 (Watkins absent)

City Council Regular Meeting 05/02/2017 (Staff Report)
Discussion and possible action on a Resolution authorizing the Mayor, Vice
Mayor, and City Manager, or any combination thereof, to prepare, sign, and submit, on behalf of the City Council, a written argument in support of the Commercial Cannabis Business Tax Measure and a written rebuttal to any argument against the Measure. 
City Council Moves Approval 5-0

City Council Regular Meeting 10/17/2017 (Staff Report)
Discussion and possible action on Resolution approving new rates to the Measure A - Commercial Cannabis Business Tax Rate for Commercial Cultivation Activities Only.
City Council Moves Approval 5-0

Press Release "SHASTA LAKE CALIFORNIA APPROVES CANNABIS PERMITTING, AND SETS INITIAL COMPETITIVE TAX RATES

City of Shasta Lake • 1650 Stanton Drive • Shasta Lake, CA 96019 • Phone: 530-275-7400 • Fax: 530-275-7414 "Equal Opportunity Provider, and Employer"
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