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County considers cannabis tax for November ballot
cannabis tax graphic

Five years after Stanislaus County implemented a commercial cannabis plan, the Board of Supervisors will consider changing the way they receive revenue from the special permit businesses.

County Supervisor Vito Chiesa of Hughson has proposed a tax on cannabis retailers. Supervisors will have to decide within the next couple of months the details of such a tax and whether to bring it to the voters on the November ballot. Currently cannabis retailers have a development agreement with the county that sees them paying an eight percent fee.

According to Chiesa, a tax would better serve retailers and simplify the assessment process. The proposal would aim to lower fees or assessments that retailers are paying now.

“We did a development agreement because of the expediency of things,” he said. “A tax has to be passed by the people and costs money, so like most cities we just went with development agreements. I don’t know where the board stands. We have about two months to come to a decision.”

At the request of license holders, supervisors voted on May 10 to eliminate a community contribution fee that required cannabis stores to pay annual five-figure amounts to assist community programs with a focus on youth. The county is looking to amend the community contribution program. 

The tax would be for the storefront and not for the growers. There are currently seven dispensaries in unincorporated areas in Stanislaus County. Under the current development agreement, Honest Choice of Denair pays the county about $5,000 a month, depending on revenue. 

Chiesa is looking to move away from the development agreements mainly because of their instability. Currently, the cannabis industry is facing some uncertainty.

“It’s supposed to be based on something, but it’s really not,” he said. “Revenues go up and revenues go down. Right now, the total revenue is going down per dispensary because the market is being flooded.”

Due to decreases in demand, California cannabis growers were getting an average of just over $800 per pound in April, down from $1,580 in October 2020, but some were settling for less than $300 a pound.