From: Monica Gray <[email protected]>
Sent: Tuesday, February 18, 2025 11:00 AM
To: Distrib- City Clerk <[email protected]> Cc: Nurit Raphael <[email protected]>
Subject: No to Extending Cannabis Tax Rate
Dear members of the San Rafael City Council and Staff,
I write to you as a business operator, as someone deeply invested in the future of our city, and as a member of a community that is trying desperately to survive under an extraordinary burden.
Today, I write to you about the urgent need to reduce the local cannabis tax in San Rafael from 2% to 0%.
This is not an ask I make lightly, nor is it one born out of convenience or comfort. It’s born out of necessity—a plea for survival.
Many of us have already witnessed the toll this industry’s taxation and regulation have taken.
We’ve seen our colleagues, our friends, and our neighbors—businesses that once proudly operated in San Rafael—close their doors under the immense weight of these financial pressures.
They were manufacturers who supplied jobs, contributed to our local economy, and believed in the potential of this industry. And now they’re gone.
But if something doesn’t change, their story will also become ours.
Starting this July, the state excise tax is scheduled to increase from 15% to 19% of gross receipts.
This alone will deal a devastating blow. At the same time, federal relief remains far out of reach.
Rescheduling cannabis to a Schedule III substance, which could grant access to normal tax deductions, is no longer on the table at this point. That means we are still subject to Section 280E of the tax code, preventing us from deducting even the most basic business expenses.
On top of this, sales are dropping. The illicit market—free of regulation, taxation, and oversight—continues to undercut us, leaving us to compete with prices we simply cannot afford to match while remaining compliant. Insurance costs have skyrocketed, driven by the increasing risk of fires in our region. And yet, through all of this, we are still held to tax burdens that no other industry faces, further widening the gap between survival and failure.
There is no other industry that is taxed and regulated like cannabis—and while we accept that cannabis is unique, the burden we carry has crossed into the realm of the unsustainable.
It’s important to note that the City of San Rafael already receives portions of the local sales tax we pay to the CDTFA. And yet, the additional 2% local tax on gross receipts has become an immovable obstacle in a landscape already riddled with challenges. Removing this tax would create the breathing room that businesses like mine need to operate in San Rafael, to succeed in San Rafael, to stay in San Rafael.
Members of the Council and staff, I ask you to consider the true cost of inaction. Without a reduction in this tax, businesses like mine—and others in this community—are at risk of disappearing entirely. And when we go, so too do the jobs, the economic contributions, and the spirit of entrepreneurship that we bring to this city.
Thank you for your time and your consideration of this critical issue. We love this city, and we want to continue to contribute to its growth and success. But we need your help to make that possible. Please help us ensure that San Rafael remains a place where businesses like ours can not only exist but thrive.
Thank you,
--
Monica Gray
COO
Nice Guys Delivery
P: +14154647572
E: [email protected]
niceguysdelivery.com
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