The Goleta City Council increased its tax rate on medicinal cannabis and expanded business hours for dispensaries and delivery companies Tuesday night during a discussion on the cannabis business license ordinance.
The Goleta City Council first adopted the cannabis business license ordinance in July 2018 to regulate commercial cannabis business and in November 2018, Goleta voters approved a ballot measure to establish a tax on cannabis businesses. The maximum tax rate the city can impose on cannabis businesses is 10%.
Tuesday’s updates change the tax rate for medicinal cannabis business operations from 0% to 5% to match the rate for adult-use retail cannabis. This change is set to go into effect on Jan. 1, 2024.
Five operators in Goleta currently report and track a portion of sales under the medicinal cannabis tax rate.
Council members also approved changing the permitted hours of operation for cannabis businesses, allowing businesses to be open from 6 a.m. to 10 p.m., aligning with the state and county’s practices.
Currently, storefront cannabis retailers can have open hours between 10 a.m. and 8 p.m., while non-storefront or delivery retailers can operate between 9 a.m. and 9 p.m.
Other amendments approved Tuesday evening are intended to streamline and simplify business processes, including changes in ownership or premises, and updates to what is required from employees of cannabis retailers.
The city also approved a new fee that would be applicable to licensed operators who want to change their licensed premises before the annual renewal period. This change in premises fee would be $4,530.
Goleta decided to allow six cannabis dispensaries citywide and spread them out a bit geographically. There is no cap on the number of delivery-only cannabis operators.
More information on the updates to the cannabis business license ordinance and tax rates are available in the staff report for Tuesday’s Goleta City Council meeting, which is available online here.