Here’s some good news — finally — for the struggling local cannabis industry. At its June 20 meeting, the San Luis Obispo County Board of Supervisors voted 4-1 to lower the county’s cannabis business tax rate by 2 percentage points. On July 1, the tax will decrease from 8% to 6% — and stay there until July 2024. The tax, combined with fees for inspections, permits, background checks, and license renewals, makes it difficult for cannabis business owners to pay their bills, according to county Supervisor Dawn Ortiz-Legg. By not cutting taxes, “We could be killing this industry,” Ortiz-Legg said at the June 20 meeting.
Supervisor Debbie Arnold cast the lone dissenting vote at the meeting, noting that the cannabis business tax already doesn’t cover the county’s costs for regulating the cannabis industry — which range from processing permits to paying San Luis Obispo County Sheriff’s Office deputies to conduct on-site inspections. Lowering the tax means the county general fund will have to pick up the difference, she said June 20.
“We shouldn’t be asking the other voters and taxpayers to be subsidizing anybody’s small, private business,” Arnold said. Ortiz-Legg, however, said that lowering the tax could increase the county’s revenue over time.
Continuing to raise the tax could be so burdensome on cannabis businesses that they shut down or move to counties with lower taxes, she said. Reducing the tax would relieve pressure on businesses, allowing them to make a larger profit and eventually pay more taxes to the county, according to Ortiz-Legg.
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