9.04.136 Cannabis businesses.
A.
1. Every Medical Cannabis Business that is not a Nonprofit Organization as defined in Section 9.04.305, and every Non-Medical Cannabis Business, shall pay an annual tax for each thousand dollars of gross receipts as provided in Section 9.04.240. If the "Regulate, Control and Tax Cannabis Act of 2010" on the November 2010 state ballot passes and takes effect, the maximum gross receipts rate that may be applied to medical cannabis businesses shall be reduced to 1.8%, or $18 per $1000.
2. Except as provided in paragraph 1 of this subdivision, the tax on Medical Cannabis Businesses that is imposed by this Section shall be phased in as follows:
(a) The tax payable in 2011 shall be $18 per $1000 of gross receipts after June 30, 2010.
(b) The tax payable in 2012 shall be $25 per $1000 of gross receipts after January 1, 2011.
(c) The tax payable in subsequent years shall be $25 per $1000 of gross receipts during the preceding calendar year.
3. Temporary Exemption.
(a) Every Medical Cannabis Business and every Non-Medical Cannabis Business shall be temporarily exempt from the tax rates provided in this section and Section 9.04.020 for the period beginning January 1, 2023 and ending July 1, 2025. This temporary exemption shall apply retroactively beginning January 1, 2023. Payment of taxes due for calendar year 2022 will still be applicable.
(b) For the period beginning January 1, 2023 and ending July 1, 2025, in lieu of paying the Medical Cannabis Business and Non-Medical Cannabis Business tax rates provided for in this section and Section 9.04.020, each cannabis business will pay the business license tax rate for the business type that most closely represents the nature of its current operations, e.g. retail trade (Section 9.04.145), manufacturing (Section 9.04.185), and wholesale trade (9.04.150).
(c) Any late penalties levied between the period of January 1, 2023 and enactment of this amendment including but not limited to penalties provided for in Section 9.04.110 and 9.04.115 shall be waived. Any interest on late penalties accrued pursuant to Section 9.04.120 during this same period shall also be waived.
(d) Any tax payments already made for the first quarter (January 1, 2023 to March 31, 2023) of the 2023 fiscal year shall be applied as a credit against the payment of future taxes or fee payments made pursuant to this Section, including payments due under subsection 9.04.136.A.3.b.
B. For purposes of this Chapter:
1. "Medical Cannabis Business" means any activity regulated or permitted by Chapter 12.26 or Title 23 that involves planting, cultivating, harvesting, transporting, dispensing, delivering, selling at retail or wholesale, manufacturing, compounding, converting, processing, preparing, storing, packaging, or testing, any part of the plant Cannabis sativa L. or any of its derivatives, pursuant to Health & Safety Code sections 11362.5 and 11362.7-11362.83.
2. "Non-Medical Cannabis Business" means any of the activities described in the preceding paragraph that are not conducted pursuant to Health & Safety Code sections 11362.5 and 11362.7-11362.83, but are otherwise authorized by state law.
3. "Cannabis Business" includes both Medical Cannabis Businesses and Non-Medical Cannabis Businesses.
4. A Cannabis Business shall be deemed a "Business" under Section 9.04.010 and as that term is used in this Chapter.
C. For purposes of this Section and Section 9.04.305.A.2, "gross receipts" includes any monetary consideration for medical cannabis whatsoever, including but not limited to: membership dues; reimbursement pursuant to Health & Safety Code sections 11362.5 and 11362.7-11362.83; and any money received for wholesale or retail sales.
D.
1. The annual tax rate imposed by Section 9.04.240 on Non-Medical Cannabis Businesses shall apply to the sum of gross receipts as defined in Section 9.04.025 and this Section.
2. The City Council may impose the tax authorized by this Section at a lower rate, and may establish an exemption for Cannabis Businesses whose gross receipts are below a specified amount. The Council may adopt different rates and exemption levels for Medical and Non-Medical Cannabis Businesses. No action by the Council under this paragraph shall prevent it from subsequently increasing the tax rate for any type of Cannabis Business to the maximum specified in this Section and Section 9.04.240 or from modifying or eliminating any exemption.
E. In order to aid in the City’s collection of taxes due under this Chapter and ensure that all Cannabis Businesses are taxed consistently to the best of the City’s ability, beginning January 1, 2011, in any Cannabis Business, that obtains any product containing Cannabis sativa L. or any of its derivatives for monetary consideration that constitutes gross receipts under subdivision (C) for the provider of that Cannabis sativa, shall either:
1. Report quarterly to the City all such transactions, the monetary consideration involved, and the identity and contact information of the person or entity to whom or to which monetary consideration was provided; or
2. Collect the tax that would be payable as a result of the transaction from the person or entity to whom monetary consideration was provided and remit it to the City.
F. The City Manager may promulgate regulations to implement and administer this Section, including allowing Medical Cannabis Businesses to remit taxes more frequently than annually. (Ord. 7880-NS § 1, 2023; Ord. 7160-NS § 1, 2010)