Title
Introduce, waive reading of, and set December 6, 2022 at 10:30 a.m. as the date and time to consider adoption of an ordinance amending Chapter 7.100 of the Monterey County Code to reduce the tax rate imposed upon manufacturers of commercial cannabis from 3.5% of gross receipts per fiscal year to 1.5% of gross receipts per fiscal year.
Report
RECOMMENDATIONS:
It is recommended that the Board of Supervisors:
Introduce, waive reading of, and set December 6, 2022 at 10:30 a.m. as the date and time to consider adoption of an ordinance amending Chapter 7.100 of the Monterey County Code to reduce the tax rate imposed upon manufacturers of commercial cannabis from 3.5% of gross receipts per fiscal year to 1.5% of gross receipts per fiscal year.
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. In March 2022, the Board adopted an ordinance to permanently remove automatic increases.
Following a public comment received during a Cannabis Committee (Committee) meeting in September 2022, staff was directed to return to the Committee with a recommendation on modifications to the manufacturing tax rate. Staff returned to the Committee in October 2022 to gain direction based on their findings and recommendations.
The local commercial cannabis industry is primarily cultivation oriented, representing 81% of total state licenses for the unincorporated Monterey County area. Processing and distribution follow at 7%, while manufacturing makes up just 2% of licenses within the unincorporated area. There are nine Type-6 (non-volatile extraction methods) ...
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