The San Juan Bautista City Council took the final steps on Jan. 21 to adopt citywide cannabis laws by unanimously approving tax rates and rescinding the ban on cannabis sales, manufacturing and distribution. The city first implemented the ban in 2017, and began the 60-day process of removing it on Dec. 17.
Council members adopted the following tax rates:
- Cultivation: $5 per square feet
- Distribution: 4% of gross receipts
- Manufacturing: 5% of gross receipts
- Retail: 5% of gross receipts
- Laboratory testing: 3% of gross receipts
- Microbusinesses: 5% of gross receipts
The rates fall in the middle of a range set by Measure I, which San Juan Bautista voters approved in 2018. The city could begin accepting applications as soon as the third week of February.
“The reason that the council decided to go that route is to allow you [council members], at your discretion at any given meeting through a resolution, to set your tax rate at any given year,” Pinnacle Strategy President Victor Gomez said during a presentation. The city contracted Gomez for $9,000 to help draft a cannabis ordinance. He also helped establish the rules and regulations, which the council adopted on Nov. 19.
After comparing taxes on cultivation in other jurisdictions, Gomez reminded the council that San Juan Buatista has limited cultivation space, with about 25 acres in four industrial-zoned parcels of land.
“What you’re likely going to generate more taxes from is the retail side of the operations because that’s more dependent on volume,” Gomez said. He added that he will work with City Manager Don Reynolds to develop a website for cannabis applicants. The goal is to have it ready by March 1.