File #: 20-424    Name: 2020_05_19_MCC Chpt 7.100 revisions to Commerical Cananbis Tax Escalator_finalv2
Type: General Agenda Item Status: Passed - County Administrative Office
File created: 5/15/2020 In control: Board of Supervisors
On agenda: 5/19/2020 Final action: 5/19/2020
Title: Adopt an ordinance amending Chapter 7.100 of the Monterey County Code to suspend the Fiscal Year 2020-2021 automatic increases on the County's commercial cannabis business tax rates, and resume the automatic increases in Fiscal Year 2021-2022 on July 1, 2022. (ADDED VIA ADDENDA)
Attachments: 1. Board Report, 2. Attachment A Draft Ordinance_redline version, 3. Attachment B Draft Ordinance _clean version (002), 4. Attachment A Draft Ordinance_redline version, 5. Item No. 47.1 Board Order and Ordinance No. 5330
Title
Adopt an ordinance amending Chapter 7.100 of the Monterey County Code to suspend the Fiscal Year 2020-2021 automatic increases on the County's commercial cannabis business tax rates, and resume the automatic increases in Fiscal Year 2021-2022 on July 1, 2022. (ADDED VIA ADDENDA)
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:

Adopt an ordinance amending Chapter 7.100 of the Monterey County Code to suspend the Fiscal Year 2020-2021 automatic increases on the County's commercial cannabis business tax rates, and resume the automatic increases in Fiscal Year 2021-2022 on July 1, 2022.

SUMMARY/DISCUSSION:

Monterey County imposes an annual business tax on cannabis businesses pursuant to Monterey County Code Chapter 7.100 and such tax is collected by the Treasurer-Tax Collector. The COVID-19 pandemic has created economic turmoil for numerous types of businesses, and cannabis businesses in particular have been impacted because they are not eligible for federal assistance or traditional banking relief to survive the economic downturn and many face permanent closure. The permanent closure of cannabis businesses may cause widespread unemployment, abandonment of ongoing greenhouse rehabilitation in the Salinas Valley, and reversion to the illegal black-market sale of cannabis and cannabis products.

In response to the Board of Supervisors Referral 2020.15, staff presented a report on implications of the automatic cannabis tax escalator that would take into effect on July 1, 2020. The Board of Supervisors approved to freeze the automatic cannabis tax increases and directed staff to return to the Board with an amendment to Chapter 7.100.

The ordinance modifies the automatic increases to commercial cannabis tax rates. Specifically, it prescribes the following:

- Taxes on indoor and mixed light cultivation and nurseries will automatically increase by $1.00 on July 1, 2021.

- Taxes on manufacturers and distributors will automatically inc...

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