Title
a. Receive a report on commercial cannabis manufacturing business activity and related commercial cannabis revenue in the unincorporated area of Monterey County;
b. Review staff recommendations to amend the commercial cannabis manufacturing tax rate;
c. Direct staff to prepare a report to the Board of Supervisors on the Committee's recommendation regarding an amended rate for commercial cannabis manufacturing; and
d. Provide further direction as appropriate.
Report
RECOMMENDATIONS:
It is recommended that the Board of Supervisors Cannabis Committee:
a. Receive a report on commercial cannabis manufacturing business activity and related commercial cannabis revenue in the unincorporated area of Monterey County;
b. Review staff recommendations to amend the commercial cannabis manufacturing tax rate;
c. Direct staff to prepare a report to the Board of Supervisors on the Committee's recommendation regarding an amended rate for commercial cannabis manufacturing; and
d. Provide further direction as appropriate.
SUMMARY/DISCUSSION:
In July 2016, the Board of Supervisors (Board) adopted Monterey County Code 7.100, which established an initial commercial cannabis gross receipts tax rate of 5% for all non-cultivation activities. In July 2018, the Board adopted an ordinance to establish a specific manufacturing gross receipts tax rate of 2.5%. In July 2019, the automatic escalator amended the commercial cannabis manufacturing gross receipts tax rate to 3.5%, which is the current rate. The rates imposed on manufacturing activities by nearby jurisdictions range from 2% to 10% and can be referenced in Attachment A. In May 2020 and May 2021, respectively, the Board suspended automatic annual escalators. In March 2022, the Board adopted an ordinance to permanently remove automatic increases.
The local commercial cannabis industry is primarily cultivation oriented, representing 81% of total state licenses for the unincorporated Monterey County area. Processing and dis...
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