On the heels of a statewide cannabis tax structure reform, Tulare elected officials agreed to place a tax measure on the November ballot that could boost the coffers.
On Election Day, Tulare voters will decide whether to support a cannabis tax, maxed at 10% in the city. The measure is likely to raise prices at local dispensaries but in return, city officials say, those tax dollars will benefit the city’s infrastructure, public safety, and the unhoused crisis.
Still, some residents and business owners are concerned about the future of the local cannabis industry.
At Herb ‘N Vibes, manager Alyssa Felix, says they serve a lower income clientele and they try to make affordable products for their customers. She worries that those affordable options will no longer be available for her community.
“It’s not going to have a good impact,” she said. “We focus on affordability and that tax is gonna raise that price for someone barely being able to buy this one thing. Now they’re going to say, ‘I can’ t.’”
Currently, three dispensaries are allowed to operate in Tulare, according to City Manager Marc Mondell. Two are in the construction phase near the Tulare Outlets, while Herb ‘N Vibes is the sole dispensary serving the medicinal and recreational cannabis clientele.
As a former medical dispensary, Herb ‘N Vibes helps a broad range of patients, some dealing with chronic pain and others with cancer.
Isaac Gonzalez is one of those clients.
“For me it’s really helped manage my anxiety. There was a while where I had a bit of an eating and sleep disorder,” he said.
Gonzalez says his failed bout with western medicine led him to medicinal marijuana. He is concerned the proposed tax will only be the beginning of steep prices at Tulare dispensaries.
“As a consumer, it would raise the prices across the board for everything. This is the first step to more heavy taxation,” he said. “I already feel that we get taxed too much for marijuana not as much as other drugs. And it feels unfair. It feels like maybe if we do take this step, when does it stop?”
The consumption tax will only be paid by those purchasing marijuana products and those in the industry, city officials said. Residents who don’t buy cannabis will be excluded.
“I don’t want to pay more. I don’t have more, but I’ll do it,” Tulare resident John Riggs said. “[But] what about the people who are struggling? This is the only medicine they can get [that] takes the pain away. I don’t think we should be taxed for that. I think you spread it out a little bit.”
Right now, dispensaries are paying different sales taxes to the city. If the measure is approved, each dispensary will be on the same tax playing field. Initially, dispensaries will pay the city a 5% tax on cannabis sales, but no more than 10%. This rate will be reviewed annually, Mondell said.
Mondell feels Tulare’s cannabis industry is already doing their part for the city’s economy, providing jobs and city revenue. He doesn’t anticipate the new tax hurting local dispensaries, but instead focuses on additional funding projects.
“It will have a major positive benefit if approved by the voters. The city intends to use the dollars generated from the tax to pay for public safety as well as fund the operations of the proposed homeless shelter which will help to remove the homeless encampments throughout the city,” Mondell stated in an email to the Visalia Times-Delta.
Although Gonzalez said he’ll most likely complain about the tax, he does have faith city officials will use the tax revenue for its intended purpose.
“I’m one of the only people that will be okay with the tax. I trust that our county will do this,” he said. “I just want to be able to see with my own eyes that our taxes are actually taking effect .”
Others like Riggs and Jordan Haney, Herb ‘N Vibes’ alternative relief specialist, say that they see value in the tax revenue. However, finances and accountability are aspects of city officials and voters should need to take into account this November.
“The businesses will make the tax work. But we’re going through almost a recession and you have people that are barely scraping by,” Haney said. “Is this really the time to add an additional tax with what’s going on in our financial situation?”
Haney proposes city officials and voters wait to review the revenue tax stream from all three dispensaries next year. She fears that her most vulnerable patients could potentially buy from the black market.
“The patients who use medicinal cannabis will have to turn to the streets, and it will not be the same as getting it here,” she said. “They’re gonna go to the streets and cause more chaos.”
The illegal marijuana market was a factor in the newly adopted California cannabis tax reform signed by Gov. Gavin Newsom earlier this month.
According to California’s Department of Cannabis Control the newly signed bill focuses on several key elements:
- Suspends the cannabis cultivation tax
- Strengthens enforcement tools against illegal cannabis operators
- Retains the current 15% excise tax rate until at least 2025 and therefore increase tax rate no higher than 19%
- Moves cannabis excise-tax collection and remittance to retail in 2023, establishing one point of collection and remittance and simplifies tax requirements for the entire cannabis supply chain
- Protects youth, environmental, and public safety programs funded by cannabis tax revenue.
- Makes illegal cannabis businesses liable for all unpaid tax
- Supports equity businesses
The deadline to register for California’s November General Election is Oct. 24.
Felix and Haney are hopeful for a favorable result in November and have a message for the voters.
“I would like to say residents will vote, ‘no.’ But there is a good majority of people in low income that don’t vote, are not registered or don’t have the outlet,'” Haney said.