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CONSIDER PLACING BEFORE THE VOTERS AT THE NOVEMBER 8, 2016, ELECTION TWO MEASURES THAT WOULD OVERTURN THE CURRENT BAN ON MEDICAL CANNABIS DISPENSARIES AND CULTIVATION AND WOULD INCREASE THE BUSINESS LICENSE TAX ON MEDICAL CANNABIS BUSINESSES
recommended action
RECOMMENDATION
It is recommended that the City Council consider placing before the voters at the November 8, 2016 election two measures that would overturn the current ban on medical cannabis dispensaries and cultivation and would increase the business license tax on medical cannabis businesses.
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Summary
At the June 7 meeting of the City Council, proponents of a ballot measure that would overturn the current ban on medical cannabis dispensaries and cultivation and would increase the business license tax on medical cannabis businesses requested that the City Council place that measure on the ballot for the November 8, 2016 election. The City Council then directed the City Attorney to provide a draft measure for City Council consideration that would accomplish the above-stated objectives, while also modernizing the city’s applicable code provisions to adhere to changes in state law.
DISCUSSION
Background
The City currently does not allow medical cannabis dispensaries or cultivation, with the exception of two dispensaries that were fully permitted prior to the enactment of the current ban. At the June 7, 2016 meeting of the City Council, proponents of a ballot measure that would overturn the current ban on medical cannabis dispensaries and cultivation and would increase the business license tax on medical cannabis business requested that the City Council place that measure on the ballot for the November 8, 2016 election. The City Council then directed the City Attorney to provide a draft measure for City Council consideration that would accomplish the above-stated objectives, while also modernizing the city’s applicable code provisions to adhere to changes in state law.
Present Situation
The draft medical cannabis measure would overturn the current ban on medical cannabis dispensaries and cultivation by allowing up to four dispensaries and four cultivation sites within the city. The measure would limit dispensaries to certain commercial and industrial zones and limit cultivation sites to certain industrial zones. In addition, no more than two of either use could be located in any given City Council district and both are subject to a use permit and locational restrictions that ensure their separation from sensitive uses.
The draft medical cannabis measure also largely reenacts the City’s prior permitting system for medical cannabis dispensaries, including the requirement of an operator’s permit and employee permits issued following a background investigation.
The draft tax measure would increase the business license tax applicable to medical cannabis business from $25 per one-thousand dollars in gross receipts to a range of $35 to $50 per one-thousand dollars in gross receipts. This measure proposes a general tax, so it requires a simple majority for passage and the revenue generated will be available to the City to use for any legal purpose.
FINANCIAL SUMMARY
Placing these measures on the ballot will require an expenditure of approximately $120,000. If approved the measures could generate additional tax revenue and cause additional expenditures in amounts estimated between $672,000 and $1,000,000.