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Memorandum
To: Ms. Elizabeth Hause, Assistant to the City Manager, City of Redondo Beach From: Mr. John Yonai, Mr. Jason Chiang, Ms. Jane McFarren, & Mr. Rob Hoffman, Tierra West Advisors Date: May 9th, 2024
RE: Cannabis Business Tax Rate Analysis in CA Cities
Ms. Hause:
Per your request during our 5/6/24 meeting, Tierra West has compiled the following analysis on Cannabis Business Tax Rates in other California cities.
Culver City
• 6%-10% range, with initial 6% rate; can be adjusted by City Council resolution after minimum 2 years
Long Beach
• 8% gross sales for adult-use cannabis licensees
Mammoth Lakes
• Maximum tax rate of 8% for retail
Malibu
• 2.5% of gross receipts
Oakland
• Tiered; 5% rate for operators with over $1.5MM equity or over $750k non-equity Oceanside
• 5% of gross receipts for retail, effective 2021
Palm Springs
• 10% retail tax on cannabis products; currently considering lowering to 5% Palm Desert
• Reduced from 10% rate to 5% in March 2023
Paso Robles
• 10% of gross receipts, effective February 2021
San Diego
• 8% cannabis business tax rate; initially 5%, increased in July 2019 San Francisco
• Tiered for retail; 2.5% for $1MM-$1.5MM of activity; 5% for over $1.5MM Santa Cruz
• 7% cannabis business tax for retail, effective August 2019 These various Cannabis Business Tax Rates for retail cannabis serve to inform the consultant team’s forthcoming recommendations to Staff/City Council for a business tax rate at the May 14th, 2024 City Council meeting (currently approved between 3% and 9% of gross sales receipts).