Long Beach, CA
File #: 19-1202    Version: 1 Name: CM - Setting local cannabis business license tax rates
Type: Agenda Item Status: Approved
File created: 10/24/2019 In control: City Council
On agenda: 12/3/2019 Final action: 12/3/2019
Title: Recommendation to receive and file a report on the fiscal and jobs impact of reducing cannabis business license tax rates for Manufacturers, Distributors and Testing Laboratories to 1 percent, 2 percent, or 3 percent of gross receipts; and, provide further input and policy direction to staff on cannabis business license tax rates. (Citywide)
Sponsors: City Manager
Attachments: 1. 120319-R-25sr&att.pdf, 2. 120319-R-25 PowerPoint.pdf
TITLE
Recommendation to receive and file a report on the fiscal and jobs impact of reducing cannabis business license tax rates for Manufacturers, Distributors and Testing Laboratories to 1 percent, 2 percent, or 3 percent of gross receipts; and, provide further input and policy direction to staff on cannabis business license tax rates. (Citywide)

DISCUSSION
At its meeting on July 2, 2019, the City Council requested staff to prepare a fiscal and jobs impact analysis for reducing cannabis business license tax rates for Manufacturers, Distributors, and Testing Laboratories to 1 percent, 2 percent, or 3 percent of gross receipts. In response, staff has prepared the attached report (Attachment A). The report is organized in the following manner:

I. Summary of the Existing Cannabis Market
II. Fiscal Impact of Reducing Cannabis Tax Rates
III. Jobs Impact of Reducing Cannabis Tax Rates
IV. Additional City Council Requests for Information

A high-level summary of findings from the report is provided below. Staff is seeking further policy direction from the City Council on cannabis business license tax rates in the City of Long Beach (City).

Summary of Report Findings

Pursuant to Section 3.80.261 of the Long Beach Municipal Code (LBMC), the City Council has the authority to increase or decrease cannabis business license tax rates by Ordinance, subject to the maximum and minimum rates approved by Long Beach voters. Such a change would not require voter approval under Article XIII, Section C of the California Constitution. Table I provides a summary of the maximum and minimum rates allowable under the LBMC, including the rates that are currently charged to cannabis businesses in the City.



Fiscal Impact of Reducing Cannabis Tax Rates

The City Council requested staff to study the impact of adjusting tax rates specifically for Manufacturers, Distributors and Testing Laboratories. A description of these business types is provided below:

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