Title
a. Consider options to amend the commercial cannabis tax structure, rates, and penalties and interest for delinquent tax accounts; and
b. Consider directing the Cannabis Program to amend Monterey County Code Chapter 7.100; and
c. Provide further direction as appropriate.
Report
RECOMMENDATIONS:
It is recommended that the Board of Supervisors:
a. Consider options to amend the commercial cannabis tax structure, rates, and penalties and interest for delinquent tax accounts; and
b. Consider directing the Cannabis Program to amend Monterey County Code Chapter 7.100; and
c. Provide further direction as appropriate.
SUMMARY:
For several months the Cannabis Program (Program) has scheduled monthly meetings with the local cannabis industry (Industry) to discuss relevant topics and concerns. The Industry voiced concerns over the commercial cannabis cultivation and distribution tax rates imposed by Monterey County Code (MCC) section 7.100.050. Specific to the distribution tax, MCC Chapter 7.100.050(G), the Industry's concern was that this tax places operators within Monterey County at a competitive disadvantage when compared to other jurisdictions that do not impose a distribution tax. The Industry has also expressed concerns that commercial cannabis product is taxed at each stage of the supply chain in Monterey County. The Program presented information related to the distribution tax to the Cannabis Committee (Committee) and Budget Committee in July and August 2021 respectively.
With regard to the commercial cannabis cultivation tax rates, the decline in cannabis wholesale price points has severely impacted the Industry financially. The Industry requested that a subcommittee be formed to discuss the current downward trends in wholesale price points and the commercial cannabis tax structure and rate, as set forth in Monterey County Code Chapter 7.100.50. Through these subcommittee meetings, the Program has provided updates to the Committee on November 17th and...
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