If you live in Ojai, the city of Ventura or unincorporated Ventura County, you have a cannabis-related ballot measure to consider this voting season. We offer a breakdown of our position on each of these three initiatives, but no matter where you stand on these issues we hope you will act NOW to request a mail-in ballot, then make a voting plan to drop it off at a local ballot drop box and avoid potential delays using the USPS.
Measure G in Ojai- NO
Shall the measure approving an immediate 3% tax on cannabis businesses, which will potentially add $465,000 – $1,550,000 annually to fund general city services, and approving authority for the City of Ojai to increase the tax on cannabis businesses up to 10% of gross receipts in the future, until the voters decide otherwise, be adopted?
It is well-documented that increasing taxes on legal cannabis only pushes consumers to the illicit market. We understand the city needs new sources of revenue but retail dispensary owners would be forced to pass this tax onto consumers. Instead of imposing even more burdensome taxes on what is considered to be a medicine by many people, we think the city should have proposed a small general district sales tax. This would distribute the burden of funding city programs and services more equitably across business types. Cannabis consumers in Ojai already pay an effective tax rate of about 26%. Until the federal government legalizes cannabis, dispensaries are subject to severe tax burdens under IRS section 280e, and we continue to face a lack of access to banking services. Cannabis businesses are also excluded from federal assistance programs available to other businesses after the Thomas Fire or as a result of COVID disruptions.
How would this tax affect you if it passed? Consider this hypothetical 1oz flower purchase: assuming a retail purchase price of of $300/oz – a retail consumer in Ojai, CA is already incurring the following taxes: $9.25/oz in cultivator taxes, built into the retail price; 7.25% state sales tax for a total of $20.28; 15% state excise tax on the wholesale markup for a total of $32.40. The total tax paid is $61.93, and the total tax rate on the transaction is 26%. If this initiative passed, the added tax would be $9-$30 on the $300 OZ, creating a new effective total tax rate of almost 30%-38%.
Measure I in Ventura- NO
To fund city services (public safety, roads, parks, etc.), shall the City tax cannabis (marijuana) and hemp businesses at annual rates not to exceed $10.00 per canopy square foot for cultivation (adjustable for inflation), 8% of gross receipts for retail cannabis businesses, and 4% for all other cannabis businesses, should the city council legalize them at a future date; which will generate an unknown amount of revenue and will be levied until repealed?
For the same reasons we are opposed to additional taxes on cannabis in Ojai, we are opposed to them in Ventura. They hurt the consumers that need the product the most, and create an incentive — not a disincentive — for consumers to spend their dollars in the unlicensed (cheaper) market. It is well-documented that increasing taxes on legal cannabis only pushes consumers to unlicensed sellers, resulting in less revenue for taxing authorities, not more. The City of Ventura would be better off creating meaningful regulations and opportunities for its residents instead of trying to fill city budget gaps by taxing an already over-burdened industry. We believe taxes should only be high enough to cover the cost of enforcing the regulations needed to achieve public health and safety goals. The City of Ventura wants to tax cannabis in order to generate extra revenue for the city, but hasn’t yet made any good faith effort to regulate cannabis business activity. Until they actually propose regulations for allowing retail sales, cultivation and manufacturing, we cannot support a preemptive tax measure.
This initiative would amend the Ventura County Ordinance Code to allow the commercial cultivation, processing, distribution and sale of cannabis within the unincorporated area of Ventura County. Sales could occur only between licensed distributors. The initiative would not allow the retail sale of cannabis to the general public within the unincorporated area. The initiative would impose a tax on commercial cannabis activities within the unincorporated area of the county in the amount of four percent of gross receipts on general cannabis cultivation and one percent of gross receipts on cannabis nursery cultivation. The taxes would be paid into the County’s general fund and could be used for any public purpose of the County.
Although we would have wanted this ballot measure to include outdoor cultivation and retail sales, for conservative unincorporated Ventura County this is a long overdue first step towards allowing commercial cannabis activity. We welcome the opportunity to source products grown locally in our region and hope this will provide new options for small farmers. The cap of 500 total acres for cultivation and 100 acres for nursery seedling propagation seems to suggest there will be plenty of opportunity for multiple licensees, even allowing for the recent report that suggests only a third of that amount would actually take place because of the restrictions in the measure and existing land use. For perspective, as of Nov 2019 the two biggest cannabis-cultivating counties in the state were farming fewer acres than this: Humboldt County had licensed 303.6 acres for cannabis production and Santa Barbara had licensed 221.