In an effort to combat illegal marijuana sales, San Francisco supervisors have unanimously approved to suspend the city’s Cannabis Business Tax through the end of next year.
According to Supervisor Rafael Mandelman, the legislation’s author, suspending the city business tax through Dec. 31, 2022, will aid in supporting legal cannabis retailers as they struggle to compete with illegally sold cannabis.
“Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers,” Mandelman said. “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.”
According to a Dec. 19 report from the California Legislative Analyst’s Office, it found that increased state cannabis tax rates were directly linked to illegal cannabis sales.
In addition to the illegal sales, increased theft is also creating problems for cannabis retailers.
“Cannabis businesses, along with many other retailers in San Francisco, are struggling under the weight of out-of-control retail theft,” Mandelman added. “San Francisco needs to do more to protect these businesses, their employees, and their customers before we hit them with a new tax.”
Once the legislation goes into effect, Mandelman said his office will next work with the City Controller’s Office, the Treasurer and Tax Collector’s Office, and the Office of Cannabis, among other stakeholders, to analyze data on cannabis business sales in the city.
