San Francisco, California officials on Tuesday unanimously voted to suspend the city’s cannabis business tax through the end of next year in an effort to curb unregulated cannabis sales, KPIX reports. The tax was set to take effect on January 1.
Supervisor Rafael Mandelman, the sponsor of the measure, said that while “cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers” the “illegal market is flourishing by undercutting the prices of legal businesses.”
“…Which is bad for our economy as illegal businesses pay no taxes while subjecting workers to dangerous conditions and consumers to dangerous products. 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.” — Mandelman in a statement via KPIX
Mandelman added the cannabis retailers are also being targeted by thieves. He said that cannabusinesses in the city – along with many other retailers – “are struggling under the weight of out-of-control retail theft.”
“San Francisco needs to do more to protect these businesses, their employees, and their customers before we hit them with a new tax,” he said in the report.
San Francisco voters approved the tax, which imposes a 1% to 5% citywide tax on gross receipts from cannabis businesses, in November 2018. It is the second time the rollout of the tax has been delayed. The initial bill to delay the rollout was also authored by Mandelman who said at the time that the tax break was needed because operators had been slow to get the permits they needed to open and that more cannabusinesses would be open by the time the tax was supposed to take effect at the start of 2021.
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