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Amendment of business tax rate for Medical Cannabis Businesses
City of Oakland
Majority Approval Required
Pass: 74413 / 70.49% Yes votes ...... 31148 / 29.51% No votes
Index of all Measures
|Results as of Jan 6 2:56pm, 100.00% of Precincts Reporting (254/254)|
|Information shown below: Summary | Fiscal Impact | Yes/No Meaning | Impartial Analysis | Arguments | Full Text|
Shall the Oakland Municipal Code be amended to increase the business tax rate for "Medical Cannabis Businesses" from $18 per $1,000 of gross receipts to $50 per $1,000 of gross receipts,and creating a new "Non-Medical Cannabis Business Tax" of $100 per $1,000 of gross receipts, with all proceeds placed in the City's General Fund to be used for any governmental purpose?
Both Medical Cannabis Businesses and Non-Medical Cannabis Businesses activities include planting, cultivating, harvesting, transporting, manufacturing, compounding, converting, processing, preparing, storing, packaging, wholesale, and retail sales of marijuana and its derivatives. However, Non-Medical Cannabis Businesses are not conducted for medical conditions, but are otherwise authorized by state law.
In February 2004, the City of Oakland adopted Ordinance No. 12585 to permit the distribution of medical cannabis. However, the City Council did not create a separate business tax classification specifically for cannabis businesses. As such, medical cannabis dispensaries were classified under the Retail Business Tax classification with a tax rate of $1.20 per $1,000 of gross receipts. In June 2009, voters authorized an increase in the business tax rate for cannabis businesses to $18 per $1,000 of gross receipts. If this measure is approved by a majority of voters, the new cannabis tax rates will be effective beginning January 1, 2011.
FINANCIAL IMPACT, The total gross receipts for the four medical cannabis dispensaries licensed with the City of Oakland in tax year 2010 were $27,806,545. Under the current business tax rate of $18 per $1,000, projected business tax revenues from the dispensaries is $500,518.
The new tax rate for Medical Cannabis Businesses is estimated to generate $889,809 in additional annual revenue based on the tax year 2010 gross receipts totaling $27,806,545, as shown in the table below.
The estimated increase in revenue will be deposited into the General Purpose Fund. The City may use the revenue from the tax for any legal municipal purpose, including but not limited to maintenance of vital services and facilities. Based on our analysis of the data provided by City staff, the projected revenues for medical cannabis businesses appear reasonable. However, currently there is not sufficient data available to project revenues for Non-Medical Cannabis Businesses. We relied on the best data available at this time, however actual results may vary from estimates above.
"Medical Cannabis Businesses" and "Non-Medical Cannabis Businesses" activities include planting, cultivating,harvesting, transporting, dispensing, delivering, selling at retail or wholesale, manufacturing, compounding,converting, processing, preparing, storing, packaging, or testing any part of the plant, Cannabis sativa L. or any of its derivatives. "Medical Cannabis Businesses" activities are those conducted pursuant to the Compassionate UseAct of 1996, California Health and Safety Code section 11362.5 and related California Health and Safety Code sections 11362.7-11362.83. "Non-Medical Cannabis Businesses"activities are those not conducted pursuant to the Compassionate Use Act and related provisions of the California Health and Safety Code.
For nonmedical cannabis business, this measure could limit from whom the City of Oakland may collect tax. Current City law allows the City to tax any nonmedical cannabis businesses, whether authorized or not. This measure would limit such taxation to only nonmedical businesses expressly authorized by state law.
The "Medical Cannabis Businesses" and "Non-Medical Cannabis Businesses" taxes are a general tax because the City could use the tax revenue for any legal municipal purpose. The California Constitution, Article XIII(C), Section 2(b) requires that the electorate approve a general tax by a majority vote. Before the City can establish the new tax rate for "Medical Cannabis Businesses" and "Non-Medical Cannabis Businesses" a majority of the electorate must approve the measure. A "yes" vote for Measure V will approve the new categories and tax rates for "medical cannabis businesses" and "non-medical cannabis businesses; a "no" vote will reject the new categories and tax rates and leave the current tax rates in place.
|Arguments For Measure V||Arguments Against Measure V|
|This measure would establish new tax rates for cannabis
(marijuana) related businesses. It does two things: 1)
Increases the business tax on medical cannabis to $50 per
$1,000 of gross receipts and 2) creates a new business tax
for non-medical cannabis businesses (recreational cannabis
use) at a rate of $100 per $1,000 of gross receipts. The new
tax on "recreational" cannabis use assumes the legalization
of cannabis for personal use by California voters this
Reported sales of medical marijuana last year in Oakland were $28 million. Passage of this measure would generate tax revenues of 1.7 million to 2.8 million dollars annually. The potential passage of Proposition 19 in this November's election to legalize marijuana for recreational use in California coupled with newly created cannabis cultivation permits positions Oakland to benefit from an industry that generates millions of dollars in sales per year. Estimates show that the newly created cannabis cultivation permits could generate additional revenue for the City of Oakland annually; a tax of 5% would generate 1.7 - 2.8 million in tax revenues for the City.
Reports provided by the medical cannabis dispensaries show that dispensary sales increased by 40% between 2008 and 2009, with Oakland's four permitted dispensaries generating 28 million dollars in gross sales last year The enhanced revenues generated by this measure would be used to pay for essential City services such as libraries,parks, police, fire, senior centers, recreation centers and youth programs.
In these difficult economic times for our City, let's be creative about the ways in which we generate additional funds for our services and programs. If this ballot measure is passed, the city could earn considerably more revenue from the recreational and medical uses of cannabis.
We urge a YES Vote on Measure V.
s/Larry E. Reid
That's because they don't care - they plainly don't care about the health and safety of our citizens, our neighbors or the well being of our children. All they talk about is Money and how much Money the City is supposedly going to get.
They are disingenuous and intellectually dishonest. If they really believed "medical cannabis" to be a viable medication, they wouldn't tax it - legitimate medicines are not taxed. Those who's health and well being depend on medications should not be made to suffer the additional burden of an illicit tax.
Non-medical (recreational) marijuana use. Don't be fooled, if the pending statewide measure fails, the so-called mega growing facilities will be used for medical cannabis, effectively shutting down all the smaller and independent growers.
Additionally, the contention the mega growers will be limited to four (4), is patently false. The legislation (Ordinance No. 13033) permits additional growers (unlimited) after two years, at the Council's discretion.
Lastly, the proponents claim that the Tax will be used for libraries, parks, police, fire and senior centers, is an unadulterated HOAX! A complete LIE! The Measure clearly states that the proceeds will go to the General Fund, to be used for ANY governmental purpose.
Vote NO on Measure V
s/David E. Mix
|As if it were not bad enough that the F.B.I. and our very own Police Chief has declared Oakland to be the most violent
city in the Nation, our City Council now proposes that
we become the "Pot" capitol as well.
To be sure, this hideous measure not only taxes the Marijuana business, it sanctions and promotes the illicit use of drugs. How can we tell our kids to stay away from drugs and alcohol while our own City Council and local leaders are saying it is O. K.
There will be an age limit (21) you say! Just how do you think that will be enforced - the same way no doubt it is (not) being enforced with alcohol. Today, there are more teenagers being maimed and killed due to alcohol use than at any other time in our nation's history.
Using "pot" is no worse than drinking you say! However, practically all those who use pot do it in conjunction with alcohol, that is clearly a double whammy. For the record, in the U.S. last year there were over 75,000 alcohol related deaths.
The "tax" will bring in a ton of badly needed revenue you say! Not true! The notion that Marijuana is a huge California cash crop is pure fiction promoted by those who advocate total legalization. The City's tax records tell an entirely different story.
More importantly, however, any extra revenue will be quickly eaten up by the Fire Department, extinguishing illegal pot growing fires and the Police Department, attempting to control the (proven) increase in drug related crimes. Not to mention the huge burden on the City's permits and inspections people charged with trying to regulate this ill conceived and ridiculous measure.
SAVE OUR CITY AND OUR KIDS FROM DRUG ABUSE - VOTE NO!
s/David E. Mix
Passage of this measure will bring in several million dollars in tax revenues per year. Gross receipts from medical cannabis dispensaries provided to the City of Oakland in 2009 totaled $28 million a 5% tax on those receipts will generate $1.4 million dollars which will be used to supplement our general fund. The cannabis industry is a growing industry; one which Oakland has always been at the forefront of, this tax will position Oakland to reap the benefits of this growing industry.
The opponents of this tax argue that any new revenues generated by the tax will be quickly absorbed by enforcement against illegal marijuana grows which is exactly the problem that exists today and we are seeking to address via regulations, enforcement, taxation, and a permitting process. This tax does not increase the number of permitted cannabis dispensaries in Oakland nor does it increase this type of activity in our City, it merely taxes an existing and thriving industry.
Vote YES on Measure V.
s/Ignacio De La Fuente
|Full Text of Measure V|
|WHEREAS, through the passage of Proposition 215,
the voters of California authorized the use of cannabis for
medical purposes in 1996; and
WHEREAS, by a 79% vote in favor of the proposition, the voters of Oakland overwhelmingly approved Proposition 215; and
WHEREAS, the City Council of the City of Oakland has adopted medical cannabis permitting regulations to prevent nuisance, provide for effective controls, enable medical cannabis patients to obtain cannabis from safe sources, and provide appropriate licensing and revenues for the City in a manner consistent with state law; and
WHEREAS, every person engaged in business activity in the City of Oakland is required to obtain a business tax certificate and to pay the City's business tax; and
WHEREAS, pursuant to Chapter 5.04 of the Oakland Municipal Code, Section 5.04.480 cannabis businesses are currently taxed under the "cannabis" at a business tax rate of $18 per $1,000 of gross receipts; and
WHEREAS, the City Council desires to create a new "Medical Cannabis Business Tax," and a new "Non-Medical Cannabis Business Tax;" and
WHEREAS, the City Council of the City of Oakland desires to amend Chapter 5.04, to establish the "Medical Cannabis Business Tax" rate for medical-cannabis businesses at $50.00 per $1,000 of gross receipts; and
WHEREAS, the City Council of the City of Oakland desires to amend Chapter 5.04, to establish the "Non-Medical Cannabis Business Tax" rate for non medical-cannabis businesses at $100.00 per $1,000 of gross receipts; and
WHEREAS, all revenues received from the tax will be deposited in the City's general fund to be expended for any lawful public purpose; now, therefore, be it
RESOLVED: That the City Council of the City of Oakland does hereby submit to the voters at the November 2, 2010 statewide general election, not more than 88 days and not more than 150 days from the date of passage of this resolution, the text of the proposed ordinance, which shall read as follows;
Be it ordained by the People of the City of Oakland:
Section 1. The Municipal Code is hereby amended to add, delete, or modify sections as set forth below (section numbers and titles are indicated in bold type; additions are indicated by underscoring and deletions are indicated by strike-through type; portions of the regulations not cited or not shown in underscoring or strike-through type are not changed).
Section 2. Code Amendment. Oakland Municipal Code Section 5.04.480 is hereby amended to read as follows:
5.04.480 Medical Cannabis Businesses.
For the Purposes of this Section:
A. "Medical Cannabis Business" means any activity regulated or permitted by Chapter 5.80 and/or Chapter 5.81 of the Oakland Municipal Code that involves planting, cultivating, harvesting, transporting, dispensing, delivering, selling at retail or wholesale, manufacturing, compounding, converting, processing, preparing, storing, packaging, or testing any part of the plant Cannabis sativa L. or any of its derivatives, pursuant to Health and Safety Code sections 11362.5 and 11362.7-11362.83
B. Every person engaged in a "Medical Cannabis Business" not otherwise specifically taxed by other business tax provisions of this Chapter, shall pay a business tax of $50.00 for each $1,000.00 of gross receipts or fractional part thereof.
5.04.481 Non-Medical Cannabis Businesses.
A. "Non-Medical Cannabis Business" means any of the activities described in section 5.04.480 (A) that are not conducted pursuant to Health and Safety Code sections 11362.5 and 11362.7-11362.83, but are otherwise authorized by state law.
B. Every person engaged in a "Non-Medical Cannabis Business" not otherwise specifically taxed by other business tax provisions of this Chapter, shall pay a business tax of $100.00 for each $1,000.00 of gross receipts or fractional part thereof.
Section 3. Severability. If a court of competent jurisdiction determines that any provision of this Ordinance, or its application to any person or circumstance is unlawful, unenforceable or otherwise void, that determination shall have no effect on any other provision of this Ordinance or the application of this Ordinance to any other person or circumstance and, to that end, the provisions hereof are severable.
Section 4. California Environmental Quality Act Requirements. This Ordinance is exempt from the California Environmental Quality Act, Public Resources Code section 21000 et seq., including without limitation, Public Resources Code section 21065, CEQA Guidelines 15378 (b)(4) and 15061(b)(3), as it can be seen with certainty that there is no possibility that the activity authorized herein may have a significant effect on the environment.
Section 5. Majority Approval; Effective Date. This Ordinance shall be effective only if approved by a majority of the voters voting thereon and after the vote is declared by the City Council. The effective date of this Ordinance shall be January 1, 2011.
Section 6. Council Amendments. The City Council of the City of Oakland is hereby authorized to amend Sections 5.04.480 of the Oakland Municipal Code as adopted by this Ordinance in any manner that does not increase the tax rate, otherwise constitute a tax increase for which voter approval is required by Article XIII C of the California Constitution; and be it
Proposed ordinance amending the Oakland municipal code to increase The business tax rate for "medical Cannabis businesses" from $18 per $1,000 of gross receipts to $50.00 per $1,000 of gross receipts and creating A new "non-medical cannabis business Tax" of $100.00 per $1,000 of gross Receipts