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ORDINANCE NO. 2023- _________
AN ORDINANCE OF THE CITY OF CULVER CITY, CALIFORNIA,
AMENDING CULVER CITY MUNICIPAL CODE SECTION
11.32.025.E TO DECREASE THE TAX ON COMMERCIAL
CANNABIS DISTRIBUTION BUSINESSES FROM 2% TO 0%
EFFECITVE JANUARY 1, 2024.
WHEREAS, on April 10, 2018 , Culver City voters approved Measure A, a cannabis business tax , adding Chapter 11.32 to the Culver City Municipal Code, which governs the cannabis business tax (the “Ordinance”). The initial and maximum rate s for the tax, as approved by voters, are as follows:
• Retail (medicinal): range of 5 -8% with an initial rate of 5% • Retail (adult-use): range of 6-10% with an initial rate of 6% • Manufacturing: range of 4-6% with an initial rate of 4% • Distribution: range of 2-6% with an initial rate of 2% • Testing: 1-1.5% with an initial rate of 1%
• Cultivation: $12 per square foot of canopy
WHEREAS, the initial rates were put in place for a minimum o f two years, after which beginning on July 1, 2020, the City C ouncil had the authority to i ncrease, by resolution, the initial tax rat e, provided such increase does not exceed the maximum rates approved by the voters and set forth in the Ordinance. To date, the City Council has not adjusted the initial rates approved by voters; and
WHEREAS, on September 11, 2023, in res ponse to a re quest by a permitted Culver City cannabis manufacturing, distribution, and delivery -only retail business, the City Council discussed whether to decrease the Cannabis Business T ax Rate for Cannabis
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Distribution from 2% to 0% and referred this matter to the Finance Advisory Committee (FAC) for consideration and a report back to the City Council; and WHEREAS, on October 22, 2023, the FAC discussed this matter and, by a 4 -1 vote, made a recommendation to the City Cou ncil that the Cannabis Business Tax Rate for Cannabis Distribution be decreased from 2% to 0%; and
WHEREAS, Chapter 11.32 may be amended by the City Council without a vote of the people as it does not increase the rate of any tax levied pursuant to Chapter 11.32.
NOW, THEREFORE, the City Council of the City of Culver City, California, DOES HEREBY ORDAIN as follows:
SECTION 1. Section 11.32.025.E of the Culver City Municipal Code is hereby amended as follows:
E. Tax on commercial cannabis distribution businesses. The Cannabis Business Tax upon every person who engages in business in the C ity as a commercial cannabis distribution business shall be at the following annual rate:
1. The tax rate u pon the effective date of this chapter, through December 31, 2023, shall be two percent (2%) of the gross receipts.
2. Beginning on January 1, 2024, the tax rate shall be zero percent (0%).
3. Beginning on July 1, 2020, such tax rate may increase by resolution adopted by the City Council but shall not exceed the maximum tax rate of six percent (6%) without voter approval.
SECTION 2. EFF ECTIVE DATE. Pursuant to Sect ion 619 of the City Charter, this Ordinance shall take effect thirty (30) days after the date of its adoption.
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SECTION 3. SEVERABILITY. The City Council h ereby decl ares that, if any provision, se ction, subsect ion, paragraph, sentence, phras e or w ord of th is Ordinance i s rendered or declared in valid or unconstitutional by a ny final action in a court of competent jurisdiction or by r eason of any preem ptive legi slation, then the C ity Council would have independently adopted the remaining prov isions, s ections, subsections, paragraphs, sentences, phrases or words of this Ordinance and as such they sha ll remain in full force and effect.
SECTION 4. PUBLICATION. Pursuant to Se ctions 616 and 621 of the City Charter, prior to the expiration of fifteen (15) days after the adoption, the City Clerk shall cause this Ordinance, or a summary thereof, to be published in the Culver City News and shal l post this Ordinance or a summary thereof in at least three places within the City.
APPROVED and ADOPTED this day of __________ 2023.
ALBERT VERA, Mayor
City of Culver City, California
ATTEST: APPROVED AS TO FORM:
JEREMY BOCCHINO HEATHER BAKER
City Clerk City Attorney