A. There is established and imposed upon each person who is engaged in business as a cannabis business an annual Cannabis Business Tax at the rates set forth in this Chapter.
B. Tax on retail medicinal commercial cannabis businesses. The Cannabis Business Tax upon every person who engages in business in the City as a retail medicinal commercial cannabis business shall be at the following annual rate:
1. The tax rate upon the effective date of this chapter, through June 30, 2020, shall be five percent (5%) of the gross receipts.
2. Beginning on July 1, 2020, such tax rate may increase by resolution adopted by the City Council but shall not exceed the maximum tax rate of eight percent (8%) without voter approval.
C. Tax on retail adult-use commercial cannabis businesses. The Cannabis Business Tax upon every person who engages in business in the City as a retail adult-use commercial cannabis business shall be at the following annual rate:
1. The tax rate upon the effective date of this chapter, through June 30, 2020, shall be six percent (6%) of the gross receipts.
2. Beginning on July 1, 2020, such tax rate may increase by resolution adopted by the City Council but shall not exceed the maximum tax rate of ten percent (10%) without voter approval.
D. Tax on commercial manufacturing cannabis businesses. The Cannabis Business Tax upon every person who engages in business in the City as a commercial manufacturing cannabis business shall be at the following annual rate:
1. The tax rate upon the effective date of this chapter, through June 30, 2020, shall be four percent (4%) of the gross receipts.
2. Beginning on July 1, 2020, such tax rate may increase by resolution adopted by the City Council but shall not exceed the maximum tax rate of six percent (6%) without voter approval.
E. Tax on commercial cannabis distribution businesses. The Cannabis Business Tax upon every person who engages in business in the City as a commercial cannabis distribution business shall be at the following annual rate:
1. The tax rate upon the effective date of this chapter, through December 31, 2023, shall be two percent (2%) of the gross receipts.
2. Beginning on January 1, 2024, the tax rate shall be zero percent (0%).
3. Beginning on July 1, 2020, such tax rate may increase by resolution adopted by the City Council but shall not exceed the maximum tax rate of six percent (6%) without voter approval.
F. Tax on testing laboratories. The Cannabis Business Tax upon every person who engages in business in the City as a cannabis testing laboratory shall be at the following annual rate:
1. The tax rate upon the effective date of this chapter, through June 30, 2020, shall be one percent (1%) of the gross receipts.
2. Beginning on July 1, 2020, such tax rate may increase by resolution adopted by the City Council but shall not exceed the maximum tax rate of one and one-half percent (1.5%), without voter approval.
G. Tax on commercial cannabis cultivation. The Cannabis Business Tax upon every person who is engaged in commercial cannabis cultivation in the City shall be at the following annual rate:
1. The tax rate upon the effective date of this chapter, through June 30, 2020, shall be twelve dollars ($12.00) per square foot of canopy space.
2. Beginning on July 1, 2020 and on July 1 of each succeeding fiscal year thereafter, the tax rate per square foot of canopy space shall increase from the tax rate effective in the prior fiscal year shall increase by the percentage change between January of the calendar year prior to such increase and January of the calendar year of the increase in the Consumer Price Index ("CPI") for all urban consumers in the Los-Angeles-Riverside-Orange County areas as published by the United States Government Bureau of Labor Statistics. However, no CPI adjustment resulting in a decrease of any tax imposed by this subsection shall be made.
3. For purposes of this Subdivision B. the square feet of canopy space for a business shall be rebuttably presumed to be the maximum square footage of canopy allowed by the business's City permit for commercial cannabis cultivation. Should a City permit be issued to a business which cultivates only for certain months of the year, the City shall prorate the tax as to sufficiently reflect the period in which cultivation is occurring at the business. In no case shall canopy square footage which is authorized by the City commercial cannabis permit but not utilized for cultivation be deducted for the purpose of determining the tax for cultivation, unless the Tax Administrator is informed in writing and authorizes such reduction for the purpose of relief from the tax prior to the period for which the space will not be used, that such space will not be used.
(Ord. 2018-010 § 1 (part); Ord. No. 2023-008 § 1)