SF delays its cannabis business tax to give legal dealers a boost

Jeff Chiu/AP

City officials in San Francisco want to delay the imposition of a tax on lawful recreational cannabis businesses to help them compete with illegal marijuana dealers.

In 2018 San Francisco voters approved the 1%-5% tax on cannabis businesses, which is scheduled to take effect next year, according to the San Francisco Examiner.

Last week the San Francisco Board of Supervisors passed an ordinance to suspend the Cannabis Business Tax for the 2021 and 2022 tax years.

“Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers,” Supervisor Rafael Mandelman said in a tweet.

“Now is not the time to impose a new tax on small businesses that are just getting established and trying to compete with illicit operators,” he added.

The ordinance requires a signature from San Francisco Mayor London Breed before it takes effect.

The tax relief could come as cannabis businesses in the Bay Area struggle to defend against a recent rash of robberies, some of which have turned violent. The losses from the crime spree are estimated to be at least $5 million, MJBizDaily reported.

Supporters of the ordinance, including the San Francisco Cannabis Retailers Alliance, told the Board of Supervisors that the cannabis industry is experiencing a drop-off in business following a boom during the early months of the COVID-19 pandemic and that a tax hike would result in higher prices for consumers.


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