San Francisco Halts Cannabis Tax to Help Combat Illegal Sales
San Francisco Halts Cannabis Tax to Help Combat Illegal Sales

San Francisco Halts Cannabis Tax to Help Combat Illegal Sales

In an effort to stop the sale of illegal cannabis, San Francisco will be suspending the Cannabis Business Tax. The city unanimously approved an ordinance to halt the city’s Cannabis Business Tax until the end of 2022.  

Cannabis Retailers are Struggling to Compete with the Price of Illegal Weed

The legislation aims to support struggling cannabis retailers. It will also allow them to provide more competitive pricing than the underground market.

The tax was first approved in November 2018. Cannabis retailers could expect to pay from 1 percent to 5 percent on their gross receipts. The approved tax is set to go in effect on January 1, 2022.

San Francisco Halts Cannabis Tax to Help Combat Illegal Sales also.

Photo by Alvaro Palacios on Unsplash

“Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers. 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. 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.”

Supervisor Rafael Mandelman, the legislation’s author

To back up his actions, Mandelman’s office referred to a December 19th report from the California Legislative Analyst’s Office that found evidence that an increase in cannabis tax rates correlated to an increasing number of illegal cannabis sales.

Robbers are Targeting Cannabis Retailers at Alarming Rates

Cannabis retailers are struggling with more than pricing wars; they are also often the target of robberies.

Very recently, on November 16th, an armed group of people stole thousands of dollars in products and merchandise from BASA. Even worse, it wasn’t the first time, though. This was the fifth burglary at the location. 

San Francisco Halts Cannabis Tax to Help Combat Illegal Sales also.

Photo by Amin RK on Unsplash

“Cannabis businesses, along with many other retailers in San Francisco, are struggling under the weight of out-of-control retail theft. San Francisco needs to do more to protect these businesses, their employees, and their customers before we hit them with a new tax.”

Supervisor Rafael Mandelman, the legislation’s author

Mandelman is on a Mission to Find a Good Solution for Cannabis Retailers and the City

Mandelman said his office will work with the City Controller’s Office, the Treasurer and Tax Collector’s Office, and also the Office of Cannabis, among other stakeholders, to collect and analyze data on cannabis business sales in San Francisco.

Their combined goal is to reevaluate the tax rate and also submit new recommendations to the Board of Supervisors for 2023.

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