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File #: ORD 21-008    Name: MCC Chpt. 7.100 revisions to Commercial Cannabis Tax Escalator
Type: Ordinance Status: General Government - Consent
File created: 5/17/2021 In control: Board of Supervisors
On agenda: 5/25/2021 Final action:
Title: Adopt an ordinance amending Chapter 7.100 of the Monterey County Code to suspend the Fiscal Year 2021-2022 automatic increases on the County's commercial cannabis business tax rates and resume the automatic increases in Fiscal Year 2022-2023 on July 1, 2022.
Attachments: 1. Board Report, 2. Attachment A Commercial Cannabis Business Tax Rates by Jurisdiction, 3. Attachment B Draft Ordinance (redline), 4. Attachment C Draft Ordinance (clean), 5. Attachment D Commercial Cannabis Business Tax Revenue by Current and Scheduled Rates, 6. (CORRECTED) Completed Board Order and Ordinance Item No. 38
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Title
Adopt an ordinance amending Chapter 7.100 of the Monterey County Code to suspend the Fiscal Year 2021-2022 automatic increases on the County's commercial cannabis business tax rates and resume the automatic increases in Fiscal Year 2022-2023 on July 1, 2022.
Report
RECOMMENDATIONS:
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 2021-2022 automatic increases on the County's commercial cannabis business tax rates and resume the automatic increases in Fiscal Year 2022-2023 on July 1, 2022.

SUMMARY
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 Cannabis Program ("Program") staff recently presented a report to the Board of Supervisors Cannabis Committee ("Committee") on implications of the automatic cannabis tax escalator scheduled to take effect on July 1, 2021.

The Committee recommended to freeze the automatic cannabis tax increases for a year and directed staff to return to the Board with an amendment to Chapter 7.100. The ordinance was introduced on May 11, 2021 and is scheduled for consideration by the Board of Supervisors for adoption on May 25, 2021.

DISCUSSION:
Implications of the Tax Escalator
Staff has conducted monthly industry meetings and received comments related to the commercial cannabis tax rate escalator where the industry presented various factors to be considered to suspend the automatic increases to tax rates.

While commercial cannabis state licenses and local permits, cultivation square footage, and gross sales have all steadily increased, Program staff acknowledges the concerns raised and continues to identify opportunities to work with operators and County leadership to support the growth and sustainability of the licensed cannabis industry.

Stabilization of the cannabis industry
In addition to the disrup...

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