Supervisors vote to halt increase for cannabis tax

Board voted to keep the tax at 6 percent rather than increasing to 8 percent

SAN LUIS OBISPO COUNTY — During a special meeting on June 24, the San Luis Obispo County Board of Supervisors voted to halt a cannabis tax increase for the county. The board voted to keep the tax at 6 percent rather than increasing to 8 percent. The tax was originally scheduled to increase starting July 1.

When implemented, the Cannabis Business Tax was meant to increase by 2 percent every year for businesses located in unincorporated areas of the county.

During public comment, Shawn Bean, owner of The Source, a local cannabis delivery company, said his business would struggle if the tax were to increase.

“A lower tax rate allows entrepreneurs like myself to hire more people, do more business, invest back into the company,” said Bean.

Other cannabis business owners who came to the meeting echoed Bean’s notion that the tax increase would severely hurttheir businesses.

Local business owner Steven Herring said, “It’s no secret that the cannabis market has been devastated and the sales prices have been cut in half since 2018 … going to 8 percent will definitely tax multiple businesses out of existance, especially the farms.”

Herring said that he is the only processing facility in SLO County and has spoken to many farms who echoed his concerns and say they will look to move to a different county if the tax increases.

Justin Cooley, who serves as the deputy director of the Auditor-Controller-Treasurer-Tax Collector’s Office, mentioned that halting the tax increase will allow cannabis industry business owners to boost their profits.

“The industry has developed more slowly than expected, so maintaining the current tax rate was intended to give them additional time,” Cooley explained.

County officials indicated that revenue from the business tax contributes to the region’s general fund. Cooley noted that the increase would have added an extra $250,000 to the fund for the upcoming fiscal year.

Supervisor Dawn Ortiz-Legg (D-3) said, “I would like to see this stay because I want these guys to continue to be able to grow their business and flourish here … I also want some of the revenue eventually go to education.”

Ortiz-Legg made a motion to maintain the cannabis tax at 6 percent which was approved unanimously with a 3-0 vote. Supervisor Debbie Arnold (D-5) was absent from the meeting to conflicting plans made before the special meeting was scheduled. Supervisor Jimmy Paulding (D-4) was also absent from the meeting. The tax is projected to rise again next year unless the board decides to oppose it.

The next San Luis Obispo County Board of Supervisors meeting is scheduled for July 9 at 9 a.m.