Sonoma voters on Nov. 3 will consider Measure X, which calls for a business tax for all cannabis and hemp businesses in the city. The amount proposed is “not to exceed 4 percent of gross receipts,” applied annually to “all cannabis businesses,” according to the ballot language of the initiative.
The revenue from the tax would go into the General Fund, out of which such city services as police, fire, roads and parks derive their funding. The ballot measure requires a simple majority to pass.
The city estimates the business tax will bring about $200,000 annually into the General Fund.
The “not to exceed” phrase means that the city council can adjust the rate yearly, if it so desires, and different business types in the cannabis industry can be taxed at different rates. In fact the proposed ordinance includes several such tiers, including a 4 percent rate for facilities that exclusively use artificial lighting, 2.5 percent for facilities that use any amount of natural lighting, 2 percent for testing labs, and 3 percent for delivery services.
However, there is no tax levied on consumers from the retail sale of cannabis itself; the business is taxed, not the consumer. And personal cultivation or use is not subject to the tax.
“The tax does not apply to personal use of cannabis or personal cannabis cultivation as authorized or exempted from licensing under state law,” reads city attorney Jeff Walter’s analysis.
The ballot includes arguments in favor, signed by all five members of the city council – Mayor Logan Harvey, and council members Rachel Hundley, Madolyn Agrimonti, David Cook and Amy Harrington.
There were no arguments in opposition filed for the measure.