With polls indicating that California may very well be heading the way of Colorado and Washington state, Santa Barbara officials are preparing to tackle the prospect of legalized recreational marijuana in the city.
On Nov. 8, among numerous other measures, propositions and candidates, Santa Barbara residents will be voting on Measure D, a proposed 20-percent tax on recreational and medicinal marijuana in the city.
The Santa Barbara Marijuana Control Act would place the tax on recreational and medicinal pot businesses’ gross receipts, which could include cultivation, delivery, manufacturing, retail sales and any number of other processes involved in such a business.
In June, the City Council voted 7-0 to place the tax on the ballot. That one-sided vote was necessary, as putting a tax proposal on the ballot in an election year in which none of the council members is up for reelection requires a unanimous vote declaring it an emergency measure.
What kind of emergency it would have to be, City Attorney Ariel Calonne told the council in June, is not specified in the California Constitution, and hasn’t been tested by the courts.
The justifications the city drafted for the tax include insufficient funds for its capital, operating, and reserve needs; extra funding being required to ensure dispensaries’ compliance with relevant laws; and extra funding being required to ensure the protection of public health and safety should recreational pot be legalized.
The purpose of the tax, which could be lowered in the future by the City Council, is to generate revenue for the city, and would require a simple majority approval to pass.
The act would go into effect March 1, 2017, and employs a wide definition of a marijuana business that includes cooperatives and collectives and those involved in related operations such as cultivation, delivery, and transportation.
Customers, patients and caregivers, though, would not be subject to it.
The revenue would go to general city services, including those intended to regulate the pot industry, such as zoning enforcement and policing, but also services related to fire, parks and the library.
After studying other cities’ medical-marijuana taxation systems, city staff estimated that about $1.1 million would be raised annually from a 20-percent rate once all three of the city’s permitted medical marijuana dispensaries are up and running.
Another $1.1 million was estimated to come from recreational pot, but with the city’s temporary ban on recreational pot businesses, that revenue wouldn’t be realized in the near term. The City Council recently extended the ban, which is now scheduled to end in September 2018.
That ban was also in response to the increasingly likely passage of Proposition 64, the Adult Use of Marijuana Act, which would legalize recreational marijuana under certain conditions.
Most polls show a sizable lead for Prop 64’s supporters, who have raised significantly more cash than the opposition.
If passed, the initiative would legalize marijuana and hemp, establish state agencies to oversee the substance, and impose cultivation taxes and a 15-percent excise tax on it.
Californians 21 and older would then be permitted to possess, transport and use up to an ounce of marijuana for recreational purposes.
Last year, the state passed a trio of laws that form the Medical Marijuana Regulation and Safety Act, which imposed a March 1, 2016, deadline for cities to enact local cultivation laws.
In a hasty response, the City Council in January approved rules limiting marijuana cultivation in the city to 100 square feet for qualified patients at their own residences.
Santa Barbara also has a dispensary ordinance covering medical marijuana storefronts, permitting up to three to operate in the city, each of which has to be located in a different pre-determined zone.
Dispensaries are required to operate as cooperatives or collectives, and cannot make a profit off the medical marijuana sold to their members.
The Community Development Department and the Santa Barbara Police Department are empowered to conduct annual inspections of the dispensaries to ensure compliance and can charge them an inspection fee.
— Noozhawk staff writer Sam Goldman can be reached at sgoldman@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.