The city of Berkeley currently taxes medical and recreational marijuana sales by 2.5 percent and 10 percent, respectively, which was strongly protested by many Berkeley cannabis business owners at a Cannabis Commission meeting Thursday.
The commission met to discuss existing and proposed cannabis regulations and to vote on a cannabis tax recommendation for the City Council. This is the first meeting after Jan. 1, when use and possession of cannabis became legal in the state of California as provided by Proposition 64, which passed in 2016. They discussed a series of recommendations made by the commission for cannabis regulations, which are meant to apply to both medical and recreational use.
During public comment at the commision meeting, Director of Government Affairs for Berkeley Patients Group Sabrina Fendrick said she believed that the taxes on cannabis were too high and should be reviewed. She added that if cannabis products in Berkeley were exponentially cheaper than in Oakland, it would cause customers in Oakland to come to Berkeley, which would help business.
“That’s going to generate more revenue than it would if there were a 10-percent tax and limited businesses and nobody coming to buy cannabis and no businesses coming,” Fendrick said.
After public comment, the commission proposed that the city review its current tax proposal on cannabis. Commissioner Austin Cable made a motion for the council to “seriously consider” reducing the gross tax receipt to an amount comparable to noncannabis businesses, which is typically about 1 percent.
According to Cannabis Commission Secretary Elizabeth Greene, the council may address tax regulations on cannabis at their regular meeting Jan. 30. The commission is currently working on a recommendation for reducing the cannabis tax for the city council to review at the Jan 30. meeting.
Daniel Kosmal works at Doc Green’s, a company that manufactures cannabis products in Berkeley. Kosmal said that in order for Berkeley to remain competitive in the cannabis industry, companies such as Doc Greens shouldn’t face such a large tax. He argued that dispensaries and cannabis manufacturers should be taxed at the same rate as other businesses.
“We’re a manufacturer, so the big problem we are running into with taxes is that we’re being taxed at every level of the transaction,” Kosmal said. “So when the grower gives us the cannabis to process, we get taxed on that. Then when we sell our wholesale product to dispensaries, we get taxed again on that, another 10 percent. And then when the dispensary sells it to the patient, there is another 10 percent on that.”
Other cannabis regulations discussed at the commission meeting included changing the buffer zone between growing zones and K-12 schools from 600 feet away to 300 feet away. The proposal also stated that the growing limit on cannabis plants would be increased to six for adult use and 10 for medical use per property.