Like so many cities, Costa Mesa in 2016 set up a tax agreement that would deeply inhibit its legal cannabis industry. In a way that’s the opposite of most California municipalities, Costa Mesa’s local industry and City Council collaborated to reverse course, creating policy that benefits both. On July 21 the change was approved as law.
- When Costa Mesa passed its ballot measure allowing cannabis manufacturers, testing labs and distributors to start up in what would become the “Green Zone,” the City Council proposed a 6% tax rate on all gross income for distributors and manufacturers. The rate proved too high when taken with the distributors’ and manufacturers’ other tax responsibilities. So, moved by industry lobbying, the City Council revisited the issue last year.
- “Costa Mesa’s lesson is that tax policy has a fundamental role to play in cannabis policies, with the need to heed the industry’s economics as much as the state or locality’s needs,” writes Ben Curren.