With the rollout of Proposition 64 on Jan. 1, Californians are beginning to enjoy legal adult-use marijuana. Some cities, though, decided not to legalize recreational cannabis, either because residents or leaders voiced opposition or because they wanted to wait to see how it played out in other areas of the state.
Chula Vista is one such city that did not join legalization efforts right away, but is considering a ballot measure this year. This would put the final decision in the hands of the residents of the city.
According to an NBC Los Angeles report, the city is working with a private research firm to survey residents for their feedback and thoughts on whether to legalize and how best to regulate the industry.The survey asks residents about a proposed city tax of up to 15 percent on marijuana businesses’ gross receipts. It also proposes taxing up to $10 per square foot of cannabis operations designated for testing, manufacturing related products, and cultivation. The city estimates this tax structure would bring in about $6 million per year, which would be used for extra law enforcement to monitor cannabis industry activity, youth education and drug prevention programs, and substance abuse programs. Remaining funds would be used to help out Chula Vista overall.
This design is similar to that instituted at the state level. Businesses will be required to comply with both state and local laws and pay taxes to each. Some consider the state and local taxes to be burdensome to businesses and have voiced concern that such a high tax structure makes operating legally unappealing to some. This could encourage black market sales to continue to flourish, critics say, with advocacy groups already petitioning for the state to reform the marijuana business taxes.
Regardless of what happens with taxes in Chula Vista and across the state, many businesses are doing quite well for themselves meeting the high demands of California residents for safe and legal recreational cannabis. Our Orange County marijuana legalization lawyers know the smartest business strategy is a legal one. We are here to help cannabis entrepreneurs set up a business plan that will be in compliance with state and local laws now and remain agile as the industry continues to grow and change. A smart and focused plan up front could save your business in the long run from costly litigation and avoidable fines.
It is not known when the survey results in Chula Vista will be made public, but some residents shared their thoughts with NBC. Their feelings on legalization mirror that of many around the country. Some are hesitant, citing their own abuse issues and concerns over legalizing something that would require drug abuse education programs as a counterbalance. Others saw it as a practical move. If people are using marijuana anyway, the city should benefit from taxes associated with legal sales. And if those taxes cover all expenses associated with legalization, some residents see it as an obvious next step in line with the direction the rest of the country is moving.
Chula Vista City Council is discussing next steps and the possible ballot initiative this month.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients, defendants, workers and those facing criminal marijuana charges. Call us at 714-937-2050.
City of Chula Vista Considering Legalizing Marijuana, Taxing Businesses, Feb. 3, 2018, By Rory Devine, NBC Los Angeles
More Blog Entries:
Despite Statewide Marijuana Legalization, Californians Must Follow Local Laws, Jan. 15, 2018, By Cannabis Law Group