Lompoc residents will get to decide whether to pass a new tax on cannabis in the Nov. 6 general election following the adoption of two resolutions by its City Council on June 19, effectively reversing their decision this past March to not explore a ballot measure.
At that time earlier this spring, Councilmember Jenelle Osborne blasted the three council members (Jim Mosby, Victor Vega, and Dirk Starbuck) that voted against taxing the nascent industry, which is largely being allowed to operate without regulation in the city.
She said the cannabis tax would be a new revenue stream the city needed and that it "was the reason I supported regulating it locally." The rest of the council apparently got the message after the resolutions passed 4-0, with Mayor Bob Lingl absent.
The first resolution dealt with actually placing the measure on the ballot while the second passed was concerned with written arguments, as well as directing the city attorney to prepare an "impartial analysis" of the proposed tax ordinance. The second resolution sets a deadline for written arguments for or against the tax to be submitted by July 20.
The proposed rates for taxation are a maximum of 1 percent on gross receipts for cultivation, and a maximum of 6 percent on receipts for retail. An annual flat fee tax of $15,000 will be applied to manufacturers and distributors with a net income of less than $2 million, or $30,000 for those with income exceeding that. Microbusinesses would see an aggregate total tax of up to 6 percent of their proceeds.
The taxes are expected to rake in somewhere between $130,000 and $470,000 annually. The projections pale in comparison to the original estimates of $700,000 to $3 million in revenue presented by an outside consultant to the council in March. City staff attributed the drop off to the lower cultivation tax rate and the "flat rate" approaches for manufacturing and distribution.
None of the taxes would apply to medical businesses or transactions.
"I think that is a healthy solution to moving toward a fair tax base that isn't going to drive away those of you that have put in an application," Osborne said, seemingly speaking to cannabis operators in attendance the night the council approved the measure. "If you're serious about this and you've planned for this, that fee shouldn't turn you away. I don't want to lose you, but again, I'm trying to walk that fine line and balance it."
The cannabis community in Lompoc is largely in favor of the taxes, according to local activist Joe Garcia, who is also a co-founder of the Lompoc Valley Cannabis Association. He said business owners are willing to do anything to help alleviate public concerns about rising crime rates, enforcement costs, and any other fears related to what he calls the city's "reefer madness."
Mollie Culver, with the Santa Barbara County's Cannabis Business Council, told the Sun that the business owners she represented were eager to help contribute to the community and its local economy by developing jobs and attracting tourism.
"We look forward to working with stakeholders to enhance city programs and projects and to provide revenue that will economically benefit public safety, municipal, and residential services while being good neighbors in our shared community," she said.
