City Attorney Impartial Analysis of Measure V
On July 10, 2018, the City Council of the City of La Mesa (“Council”) unanimously approved submission of an ordinance for voter approval to establish a Cannabis Business Tax (“Tax”). The Tax would apply to all commercial cannabis (marijuana) businesses that operate in La Mesa.
If passed, Measure V would authorize the Council to implement the Tax by resolution or amendment of the La Mesa Municipal Code for the purpose of imposing a business tax on all commercial cannabis businesses. Monies from the Tax would be deposited into the City’s General Fund to be used for general governmental purposes, including police and fire protection, road repairs, neighborhood parks, and other community services; as well as, shutting down illegal cannabis dispensaries and regulating legal medical cannabis businesses authorized by La Mesa voters in 2016. The Tax is estimated to generate $1,500,000 to $2,000,000 annually for the City of La Mesa.
The amount of the Tax would depend on the type of business operations; for example, $1 to $10 per square foot of canopy space for commercial cannabis cultivation (nursery) and up to 6% of gross receipts for all other cannabis businesses. The Tax would be imposed only on commercial cannabis businesses, and is not a sales tax imposed on qualified patients, primary caregivers or other persons who purchase or otherwise acquire cannabis for their personal use, including personal cultivation.
Measure V authorizes the Council to annually adjust the rates of the Tax, so long as the adjusted rates do not exceed the maximum rates approved by the voters. The initial rate of the Tax on retail sales to a customer with a valid California Department of Public Health Medical Marijuana Identification Card would be 0%.
Presently, in La Mesa, medical cannabis retailers (dispensaries), cultivators, and manufacturers (production of items such as edibles) are permitted by conditional use permit. However, all other medical cannabis businesses and recreational (adult use) cannabis businesses are prohibited in La Mesa. Any prohibited cannabis businesses legalized by a change in the law would also be subject to the Tax.
Measure V requires approval of a majority of the voters. A “yes” vote for Measure V will establish a Cannabis Business Tax in La Mesa. A “no” vote against Measure V will not establish such a tax. If adopted, the Tax would be levied until repealed by the voters or the Council.
