A measure to establish a cannabis business license tax in Madera is headed to the November ballot.
Madera City Council voted 5-2 on July 15 to place the measure on the ballot and give voters the chance to decide on enacting the tax.
However, Madera does not currently permit cannabis businesses, meaning the tax would not have any effect unless the city council decided to legalize marijuana businesses in the future.
The measure will require a majority vote to pass in November.
California voters approved Proposition 64 in November 2016, which legalized the use of recreational marijuana.
Shortly following that, the state legislature passed the Medicinal and Adult Use Cannabis Regulation and Safety Act, which created a licensing and regulatory framework, allowing cities to tax marijuana businesses.
In May, the city council got the ball rolling by beginning to explore a potential marijuana tax ordinance, which came to fruition at the July 15 meeting.
If the measure passes, the maximum amounts the city could tax marijuana businesses are as follows:
- $10 per canopy square foot for cultivation (adjustable for inflation).
- 6 percent of gross receipts for retail businesses.
- 4 percent for all other cannabis business activities.
The city projects the tax could generate $720,000-$1.08 million annually for the general fund once all businesses have been operating for a year.
Estimations for the cost of placing the measure on the ballot are between $90,000-$100,000.
The ballot language will read: “Shall the measure which would tax cannabis and hemp businesses if City permits and regulates such businesses, at annual rates not to exceed $10.00 per canopy square foot for cultivation (adjustable for inflation), 6% gross receipts for retail businesses, and 4% for all other such businesses which is projected to generate $720,000 to $1,080,000 annually and continue in effect until terminated by City voters with funds generated used for general fund purposes be adopted?”