Voters in cities throughout Riverside County weighed in Tuesday on a bevy of commercial marijuana licensing and tax proposals, two of which were opposed by elected officials in the municipalities.
In Banning, voters approved a pair of companion measures, N and O, that establish tax guidelines for indoor commercial marijuana cultivators, as well as retailers.
According to Measure N, cannabis manufacturers granted permits to operate in the city’s industrial district will be taxed at $15 per square foot and required to hand over 10 percent of gross receipts annually. The tax could go up to $25 per square foot, if the Banning City Council finds it necessary.
Officials estimated $1.2 million in annual revenue could be generated, all of which would be deposited into the general fund.
Measure O paves the way for removing the current ban on storefront marijuana distribution, and when and if such operations are permitted in Banning, retailers would be required to relinquish 10 percent of gross receipts to the city annually, with the prospect of paying up to 15 percent in taxes should the council vote for it.
The measure could create a $1.5 million revenue stream, officials said.
In Hemet, voters rejected Measure Y, which would have undone the city’s prohibition of commercial marijuana cultivation. The proposal was placed on the ballot after a successful signature-gathering campaign, and it stipulated that indoor cannabis manufacturing businesses could be established without a discretionary permit from the city — even though they would have to procure a state permit and be vetted by the city clerk’s office.
The petitioners proposed a $10 per square foot tax on businesses, none of which would have been permitted to sell and market cannabis products to the general public, and all of which would be required to operate in the city’s manufacturing district, according to the measure.
Leading opponents of cannabis grows, including four-fifths of the Hemet City Council, placed a competing measure, Z, on the ballot in response to Measure Y. Under Z, which was narrowly approved, no indoor or outdoor cannabis manufacturing facilities will be allowed in Hemet until at least Jan. 1, 2021, and if permitted, businesses would face $30 per square foot in fees and a 25 percent levy on gross receipts. Further, if dispensaries were to be legalized, they would be assessed a 15 percent tax on gross receipts.
In Jurupa Valley, voters appeared to have narrowly approved Measure L, which seeks to leapfrog over voter-approved Measure B from the June 5 primary election. The latter imposed a blanket ban on commercial cannabis activity citywide, but a petition drive put L on the general election ballot.
According to the measure, seven retail outlets will be allowed to open — if their operators procure state permits and their applications comply with basic provisions established under the proposal, which include locating in an area zoned specifically for commercial uses, more than 600 feet from schools and 1,000 feet from one another. Indoor commercial marijuana cultivation would be legalized under L.
A maximum $25 per square foot tax would be imposed on retailers, while growers would pay $3 per square foot.
“The local revenue generated by the sin tax would provide a source of revenue that could be used to finally crack down on illegal marijuana dispensaries and keep them out of our city,” supporter Katelyn Garcia said.
The Jurupa Valley City Council, unanimous in its opposition to the measure, stated in campaign literature that it will “prohibit the city from imposing conditions on the operation of marijuana businesses in order to protect the health and safety of the community.”
In Moreno Valley, where cannabis businesses are legal, voters approved Measure M, which will impose a $15 per square foot tax on commercial cultivators. Marijuana retailers and manufacturers will additionally be required to pay 8 percent of gross receipts annually to the city. Funds will be available for discretionary use, but supporters said the income could be dedicated to public safety.
In Palm Desert, where cannabis businesses are also legal, Measure Q will establish a maximum $20 per square foot tax on cultivators, a 3 percent tax on the gross receipts of manufacturers and a 15 percent tax on sales from mobile and storefront operations. The annual revenue generated from the measure would be about $5.4 million, according to city officials.
In Perris, another city where cannabis businesses are permitted, Measure G will establish a 10 percent straight tax on entities engaged in commercial marijuana manufacturing and distribution, generating an estimated $2.3 million annually, according to the proposal.
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