#SanDiego, home to one of the largest municipal #cannabis markets in #California, is lowering #tax rates on local manufacturers and growers in an effort to boost production overall. Despite a projected #revenue shortfall because of the tax break, the #City Council voted 6-3 to lower the rates for #marijuana #producers and #growers from 8% to 2%. The move was in response to industry insiders who have contended for years that high state and local taxes have discouraged companies from participating in the legal #market, all while the illicit market continues to thrive. To date, only 19 of 40 municipally approved #manufacturers and growers have begun operations, which has forced local marijuana retailers to find inventory from outside the city limits. Though a city analyst told the Council that lowering taxes in such a way will likely cost San Diego $2 million-$4 million over the next five years, supporters of the cut argued that the move will result in increased #sales and therefore increased tax revenue because it will incentivize the 21 unopened #businesses to open their doors. San Diego is the latest in a string of California localities to lower or pause cannabis taxes in response to industry outcries, joining #LongBeach, #Oakland, San #Francisco and #Humboldt and #Monterey counties.
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