Voters in La Mesa will decide on Nov. 6 whether to approve Measure V, a proposed law that would allow the city to tax commercial cannabis businesses and take a percentage of their gross receipts.
If approved, the city hopes to reap $1.5 million to $2 million annually.
Under the measure, the city could tax commercial cannabis growers and manufacturers at an annual rate not to exceed $10 per square foot of office space.
Voters will also decide if the city can ask for 6 percent of gross receipts from those selling cannabis-based products. Gross receipts would not include sales from qualified patients, primary caregivers or other persons who purchase cannabis products for medical use.
Patients need a San Diego County-issued California Department of Public Health Medical Marijuana Identification Card to purchase products in La Mesa.
Businesses selling cannabis in California cannot charge sales tax to those who have the official medical marijuana ID card. About 400 people in San Diego County have been issued the state medical card.
Money raised from the tax would help offset the city’s expenses related to marijuana businesses, such as additional public safety needs, public works efforts and code enforcement.
The tax would also offset costs for shutting down illegal cannabis dispensaries, regulating legal medical cannabis businesses and fund other general municipal expenses.
Voters in 2016 approved Proposition 64, a statewide initiative that gave local governments an option to allow retail sales, cultivation and manufacturing of recreational marijuana.
La Mesa voters that same year passed Proposition U, which legalized medical cannabis businesses in the city. That includes retail sales, cultivation, manufacturing and testing of products such as edibles and tinctures.
All stores must meet certain standards and obtain a conditional-use permit.
There was no tax element attached to the 2016 proposition, which was crafted by cannabis proponents.
The gross receipts element of the 2018 measure looks to be paving the way for the city to tax customers purchasing non-medical cannabis products. The city currently only allows medical marijuana to be sold in city-approved stores.
There is only one legal cannabis store open for business, The Grove, on Center Street in the city’s industrial area.
Sean McDermott is the owner and operator of The Grove, which opened its doors this summer. McDermott is also close to opening a second medical marijuana business on Federal Boulevard in neighboring Lemon Grove.
He likened the tax the city wants to impose to the “sin tax” many jurisdictions put on cigarettes and alcohol.
He said that if and when the city legalizes all marijuana sales, he will be able to stop turning away those who inquire about purchasing recreational products at his store.
“I’m excited for the opportunity,” McDermott said. “I think it’s great for the city, great for residents of East County and great for my business.”
La Mesa has several cultivation conditional use permit applications being considered and several manufacturing permit applications being processed.