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Wednesday, 01 November 2017 10:05

Upcoming Cannabis Tax Vote is Important to Understand, Citizens Say

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Upcoming Cannabis Tax Vote is Important to Understand, Citizens Say

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MODESTO - An upcoming measure on the November 7th Ballot outlining a vote on taxing cannabis businesses is important for voters to understand, citizens say.

"November the 7th is going to be a historical day in the City of Modesto," said Mark Gray. "The city is giving us as patients an opportunity to vote on a tax that will build the general fund while not taxing the patients, or anyone involved in recreational cannabis purchases."

Measure T on the ballot outlines a plan to tax cannabis related businesses and states the following:

"Shall the City of Modesto outline an ordinance establishing a cannabis business tax on all cannabis businesses in the City, up to 10% of gross receipts of each business potentially generating approximately one million dollars or more in revenues annually for general City services, including neighborhood safety, maintaining parks and recreation, and job creation, with all revenues remaining local, and which continues until repealed by the City Council or the voters?"

The tax would not apply to those harvesting cannabis legally for personal use.

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An impartial analysis by City attorney Adam Lundrigan reads as follows on the ballot:

"The City Council of the City of Modesto placed Measure T on the ballot asking voters to consider a Cannabis (marijuana) Business Tax of up to ten percent (10%) on gross receipts of all cannabis businesses. The tax is a gross receipts tax only on cannabis businesses; it is not a sales tax imposed on individuals purchasing cannabis.

Currently, cannabis businesses are not permitted in the City of Modesto. The Cannabis Business Tax would not change this. However, cannabis businesses could be allowed in the City if the City Council approves changes to the City’s Municipal Code, if voters pass an initiative to allow cannabis businesses in the City, or if the state Legislature requires the City to permit cannabis businesses.

If cannabis businesses are permitted in the City, Measure T allows the City Council to set a maximum tax rate, by resolution, on all cannabis businesses of up to ten percent (10%) on gross receipts. For example, a cannabis business with gross receipts totaling $100,000 would pay up to $10,000 in taxes to the City.

The Cannabis Business Tax would apply to any business activity involving the distribution, delivery, dispensing, exchanging, bartering or sale of either medical or non-medical cannabis or cannabis products, including cultivation, planting, harvesting, transporting, manufacturing, compounding, converting, processing, preparing, labeling, storing, packaging, testing and/or retail sales of cannabis, cannabis products, and any ancillary products, whether or not done for profit. The tax would not apply to the legal cultivation of cannabis for personal use allowed under the City’s Municipal Code and state law.

Because Measure T does not limit the City’s use of Cannabis Business Tax revenues to specific purposes, it is a “general tax” rather than a “special tax.” Revenues from the tax would be placed in the City’s general fund. The City could use the tax revenues for any legitimate governmental purpose. All of the revenues from the Cannabis Business Tax would go to the City of Modesto; none would go to the state. The tax would continue until repealed by the voters or the City Council.

A “yes” vote on Measure T would approve the Cannabis Business Tax and authorize the City Council to establish a tax rate of up to ten percent (10%) on gross receipts on cannabis businesses if they are allowed to operate in the City in the future. A “no” vote would reject the Cannabis Business Tax. Measure T would be approved if it received a simple majority of “Yes” votes.

The entire text of Measure T will be printed in the Voter Information Guide for the November 7, 2017, election."

The full text can be found by clicking HERE.

Gray was previously the operator of the Prop 215 Information Center on J Street in Modesto as well as an oversight officer of a cannabis facility in Las Vegas, Nevada. He is also aware of the concern of voters regarding the potential misuse of funds.

"What happens to the general fund? There's no accountability," Gray said. "Well there's something called get involved with the city," he urged.

"It's the best thing you guys can do as patients," he continued. "It's the best thing for our city."

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