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Santa Barbara’s 20% Marijuana Tax Passes Easily

Levy would apply to gross receipts of recreational and medicinal marijuana businesses

A measure to impose a 20-percent tax on medicinal and recreational marijuana businesses received overwhelming support from Santa Barbara voters Tuesday night.

Semi-official results showed 69.6 percent voting in favor of the measure. 

Measure D would levy the tax on the gross receipts of these businesses, which could include cultivation, delivery, manufacturing, retail sales and any number of other processes involved in such an operation.

Meanwhile, Proposition 64, the statewide ballot initiative that would legalize marijuana, passed with 56 percent of the vote.

Even with legalization, however, Santa Barbara currently has a moratorium on recreational pot businesses that is intended to give city officials the opportunity to draw up regulations. The ban is scheduled to expire in September 2018.

Measure D was placed on the ballot in June with a 7-0 vote by the City Council in what was technically an emergency measure.

The justifications the city drafted for the tax include insufficient funds for its capital, operating and reserve needs; extra funding required to ensure dispensaries’ compliance with relevant laws; and extra funding 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 council, is to generate revenue for the city.

The act would go into effect March 1, and relies on 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 would not be subject to it, however.

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.

Santa Barbara officials estimate about $1.1 million would be raised annually from the city’s three permitted medical marijuana dispensaries.

Another $1.1 million is estimated to come from recreational pot business, although that revenue would be off the table for the time-being with the moratorium.

Prop. 64, an impetus for the tax, 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, starting Wednesday.

Noozhawk staff writer Sam Goldman can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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