San Francisco Suspends Cannabis Tax To Combat Illegal Marijuana Sales

SAN FRANCISCO (BCN) — San Francisco supervisors on Tuesday unanimously approved an ordinance to suspend the city’s Cannabis Business Tax through the end of next year, in an attempt to curb illegal marijuana sales.

According to Supervisor Rafael Mandelman, the legislation’s author, suspending the city business tax through Dec. 31, 2022, would help support legal cannabis retailers as they struggle to compete with illegally sold cannabis.

San Francisco voters approved the tax in Nov. 2018, which imposes a 1 percent to 5 percent citywide tax on gross receipts from cannabis businesses. The tax is set to go into effect on Jan. 1, 2022.

“Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers,” Mandelman said in a statement. “Sadly, the illegal market is flourishing by undercutting the prices of legal businesses, which is bad for our economy as illegal businesses pay no taxes while subjecting workers to dangerous conditions and consumers to dangerous products. Now is not the time to impose a new tax on small businesses that are just getting established and trying to compete with illicit operators.”

Mandelman’s office pointed to a Dec. 19 report from the California Legislative Analyst’s Office that found that increased state cannabis tax rates were directly linked to illegal cannabis sales. [Read More @ KPIX SF]