San Fran Just Watched Their Weed Tax Go Up In Smoke

Earlier this week, San Francisco Supervisors unanimously approved legislation to suspend the City’s Cannabis Business Tax through the end of 2022.

The city said the decision to suspend the cannabis tax is an attempt to support legal cannabis retailers while curtailing illegal marijuana sales.

Spearheaded by District 8 Supervisor Rafael Mandelman, the legislation suspends the cannabis tax through Dec. 31, 2022, as legal cannabis merchants say they have difficulty competing with illegal cannabis sources.

“Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers,” said Mandelman.
“Sadly, the illegal market is flourishing by undercutting the prices of legal businesses, which is bad for our economy as illegal businesses pay no taxes while subjecting workers to dangerous conditions and consumers to dangerous products.,” Mandelman added.

“Now is not the time to impose a new tax on small businesses that are just getting established and trying to compete with illicit operators.”
In 2016, State voters passed Proposition 64 which legalized adult cannabis use and also established a 15% state excise tax on retail cannabis sales as well as a tax on cannabis cultivation.

Since the proposition passed five years ago, the State estimates that illegal market sales are $8 billion annually in California, that’s double the number of legal sales.

“The imposition of new local cannabis tax in San Francisco while State taxes remain high runs the risk of further undermining our local legal market and the good union jobs that it creates,” said Jim Araby, Director of Strategic Campaigns for United Food & Commercial Workers Union Local 5 which represents 30,000 workers in the Bay Area, including workers in San Francisco’s cannabis industry.

“This legislation will help provide additional stability for workers in the emerging cannabis industry in San Francisco.”

The Bay Area is facing a rash of retail thefts — the city says cannabis businesses are often targeted by organized and armed groups.
On November 16, BASA Cannabis Dispensary had thousands of dollars of product stolen from their store on Grove Street.

BASA owners say its business has now been robbed five times.

“Cannabis businesses, along with many other retailers in San Francisco, are struggling under the weight of out-of-control retail theft,” said Mandelman.

“San Francisco needs to do more to protect these businesses, their employees, and their customers before we hit them with a new tax.”

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