New cannabis tax measure proposed for Sausalito
A former City Council candidate has proposed a new cannabis taxation measure for Sausalito.
The measure by Timothy McCloud would place a 4% tax on the annual operation of cannabis retail businesses. The tax would be a general tax, with revenues provided to the city’s general fund on a quarterly basis, according to the initiative.
The City Council heard a presentation on the proposal on Tuesday and directed staff to prepare a report on its potential impacts. The council did not take a vote.
The council said staff would investigate the initiative’s potential fiscal effects as well as its effects on the general plan, infrastructure, businesses and land use, among other issues.
Proponents are gathering signatures to qualify the measure for the ballot. The initiative would not change Sausalito municipal code, which bans cannabis facilities within the city, including cultivators, distributors, manufacturers, processing facilities, testing facilities, medical dispensaries and retail shops. It would only apply to deliveries, the initiative stated.
The tax would apply if Sausalito were to allow storefront cannabis retail in the future. It would not apply to cultivators, nurseries, testing laboratories, distributors or manufacturers that the city might choose to permit in the future, according to the initiative.
The measure would also permit the city to amend the initiative by decreasing the tax or clarifying the method of collection. The tax could not be increased or repealed without voter approval.
McCloud noted concerns about the city’s budget in a potential recession.
“When I ran for City Council I heard from residents about them being uncomfortable with the city’s financial stability,” McCloud said. “This does not authorize any retail cannabis. It would have to come about by another measure or the City Council would have to vote on it.”
The city is required to prepare a report within 30 days if the measure qualifies for the ballot.
“However, since some of those items may take some time to study, it is usually a good idea for cities to prepare the report while signatures are still being gathered,” said City Attorney Sergio Rudin.
Councilmembers and some public commenters expressed concerns about the validity of statements being used to solicit signatures.
Councilmember Joan Cox said there were reports of signature gatherers expounding on the city’s finances as a way to accrue signatures.
“We saw last year some grave misinformation that was being distributed regarding some ballot measures,” Cox said.
Sandra Bushmaker, a Sausalito resident and former City Council member, noted that one signature gatherer discussed the city’s deficit, but could not provide more information.
“In questioning the canvasser, they knew nothing else,” Bushmaker said.
The council also expressed concerns about the apparent exemption of possible future cannabis businesses in Sausalito.
“I feel that it’s sort of evil genius in the way that is written,” Cox said. “I wanted to ensure we understand the implications of the initiative as written.”
Nurit Raphael, the owner of a cannabis delivery service in San Rafael, said she opposes the measure. She said her service might be forced to make deliveries outside of the city limits if it passes.
“We are on the brink of collapse due to overtaxation,” Raphael said. “This is the most out-of-touch cannabis initiative that I’ve seen in a long time.”
A cannabis measure on the November 2022 ballot, which would have established retail cannabis for a company called Otter Brands, failed to pass. A competing cannabis initiative was removed from the November ballot after a Marin judge ruled it was invalid because the measure’s two proponents were not Sausalito residents.