On August 1, 2016 the City Council voted unanimously to place a cannabis tax measure on the November 2016 ballot for consideration by Grover Beach voters. If approved, the City Council would be authorized to enact a tax on commercial cannabis businesses which may establish within city limits. The tax would apply to both medical cannabis businesses and non-medical cannabis businesses, if those businesses are allowed under state and local laws.
On November 8, 2016, Measure L-16, which required a simple majority vote (50%+1) for approval by Grover Beach voters, passed by 70.59%.
The ordinance to enact the commercial cannabis tax is scheduled to be presented to the City Council at the same meetings as the ordinances regarding land use and regulatory matters. Once the ordinance setting the tax rate is adopted by the City Council, the tax would become effective 30 days thereafter.
Summary of proposed tax rate:
Commercial Medical Marijuana Activates: 5% tax on gross receipts.
Non-medical Commercial Medical Marijuana Activities: 10% tax on gross receipt.
Cultivation and Nurseries: $25 per sq ft on the first 5,000 sq ft and $10 per sq ft on the remainder.
Once the ordinance enacting the tax rate is adopted, the tax will not sunset and would be subject to annual CPI adjustments. The revenue generated by Measure L-16 would go to the City’s General Fund.
Any tax on non-medical (i.e., recreational) marijuana activities could only occur if the City adopted laws allowing the recreational use of marijuana.