Cannabis

Tuesday, Tracy voters will decide whether to tax future cannabis products and services in the city.

Measure D proposes a maximum tax of $12 per square foot of plant canopy for businesses engaged in the cultivation of cannabis; a maximum tax rate of 6 percent of gross receipts for businesses engaged in the retail sale of cannabis; and a maximum tax rate of 4 percent of gross receipts for all other cannabis businesses, such as manufacturers, testing laboratories, and distributors of cannabis, cannabis products, and any ancillary products.

The city is proposing the question of whether to levy a local tax to coincide with a new ordinance that would allow two, and only two, medicinal marijuana dispensaries in town. The dispensaries can only deliver pot products and cannot sell from their business location. No sales for recreational use would be allowed.

The ordinance also mandates that the dispensaries could only go in industrial areas away from homes, schools and places of worship — which would place them at the edges of town.

City Attorney Thomas Watson wrote in his impartial analysis of Measure D that the money raised would go to “police services and code enforcement” and that “in no event may the City Council set any adjusted rate that exceeds the maximum rate established by Measure D.”

Measure D needs support from two-thirds of voters to pass. A no vote rejects the taxation. City Finance Director Karin Schnaider has said in City Council meetings that if the tax was rejected by voters, the ordinance allowing the two dispensaries would not be possible.

Voters will also decide on a countywide cannabis tax, Measure B. The initiative asks voters if the county should impose a tax rate of 3.5 to 8 percent of gross earnings on all commercial cannabis businesses in the unincorporated areas as well as $2 per square foot of grow space. The collected taxes would be earmarked for early childhood education, drug prevention, literacy and other programs for children and youth, public health, public safety and enforcement of cannabis laws.

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