City of Guadalupe voters will decide two new tax measures in November — one dealing with commercial cannabis and the other with the city’s transient-occupancy tax.
The new taxes would be paid by shoppers buying cannabis or visitors staying overnight in in hotels, motels and short-term rentals as the financially ailing city looks to boost revenue.
Measures G2026 and J2026 would each require at least 50%-plus-one vote of approval to pass.
Measure G2026 would authorize the city to set maximum tax rates of up to 8% of gross receipts for retail sales of cannabis and up to 4% of gross receipts for all cannabis business, including cultivation, manufacturing, distribution and testing.
Both measures come at a time when Guadalupe sits at a $3.6 million budget deficit.
In its approved budget for the 2026-27 fiscal year, which began July 1, the city included plans to increase revenue.
Measure G2026 would replace the city’s current public-benefit fee structure, which has the two active commercial cannabis businesses — Root One of SLO Cal Roots and Central Coast Processing — pay fees equal to 6% of gross proceeds and 2% for non-retail production.
Local cannabis businesses are advocating for the measure, explaining that the tax structure would be “fairer” and “provide greater flexibility in marketing and pricing,” according to the ballot argument in favor.
Austen Conella, CEO of SLO Cal Roots, proposed the measure at a City Council meeting, saying the existing structure isn’t “a very public process.” The current fee has to be included in the product price; the new tax would be listed on receipts.
“Having it be a consumer-facing tax instead of a burden on the business is going to hopefully make things more transparent and have less tax implications on us as a business,” Conella said.
Conella also specified that city staff expects to recommend the current 6% for retail and 2% for non-retail as the recommendation for the tax.
“Since we opened in 2024, the city has collected hundreds of thousands of dollars from us, plus the nonprofit money, plus payroll for people who live here,” Conella said. “For a city of Guadalupe’s size, that’s meaningful … and this is just going to be a more transparent and open process that allows modifications in the future.”
Measure J2026 would increase the city’s transient-occupancy tax, commonly known as a bed tax, from 6% to 12%. The tax is charged to guests in short-term rentals, hotels and motels who stay in the city for 30 days or less, and wouldn’t result in any additional taxes for local residents.
In addition to raising the tax rate, the measure would redefine “hotel” to “lodging facility” in the ordinance, which would extend the tax to cover RV parks and campgrounds.
According to the measure’s argument in favor, Guadalupe’s 6% tax is lower than every city in both Santa Barbara and San Luis Obispo counties, where rates are typically at least 12%.
While Guadalupe has limited short-term rentals, the council hopes to attract more lodging options and, therefore, wants to update the tax rate preemptively.
The increase is projected to generate up to $20,000 annually, and even more if new short-term rentals open.
The proceeds would be unrestricted and could be used for any governmental purpose, such as public safety and other city services, according to the measure’s resolution.
