This week in California, Morro Bay, Manhattan Beach, and California City each announced updates to their cannabis taxes and local regulations. Here’s what you need to know about running a cannabis business in each of these jurisdictions.
Morro Bay, California
The Morro Bay City Council approved new cannabis tax rates in Resolution No. 30-19. The commercial cannabis operations tax is set at 5% of proceeds (voters had approved a maximum rate of 10% in November, 2019). The penalty for late payment is set at 25%. Interest rates for late payment is also set at 10% of the unpaid tax as calculated from the due date of the tax (voters had approved maximum rate of 10%); the interest rate is assessed monthly on the principle of unpaid tax. Commercial cultivation of cannabis is currently not permitted in Morro Bay.
California City, California
The City Council of California City also released updated numbers in regards to their cannabis taxes. For operators in the commercial cannabis cultivation market in the city, the following tax rates apply:
- $7.00 per year per square foot of canopy space in facility that uses exclusively artificial lighting.
- $5.00 per year per square foot of canopy space in a facility that uses a combination of natural and supplemental artificial lighting.
- $1.00 per year per square foot of canopy space in a facility that uses no artificial lighting.
- $0.50 per year per square foot of canopy space for any nursery
For other parts of the cannabis industry, the following tax rates apply:
- Testing laboratories: pay 2% of gross receipts
- Anyone engaged in cannabis business other than testing laboratories or cultivators: 6% of gross receipts
Manhattan Beach, California
A resolution from the City Council strongly opposed commercial cannabis licensing in Manhattan Beach. The City Council drafted two letters, one opposing state regulation AB1356 (which would require cities to issue cannabis licenses if more than 50% of the voters supported Prop 64). The council also expressed support for litigation challenging local control over cannabis delivery. It seems Manhattan Beach is firmly opposed to opening cannabis licensing any time soon.
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