It’s the first proposed new tax the City Council has presented to Laguna Woods voters since it was founded. And it would be enacted on an industry that isn’t actually fully allowed to operate within the city.
Measure T, if approved by voters in November, would set a tax of 4% to 10% of gross receipts or $5 to $35 per square foot for retail cannabis businesses, whichever is higher, and 1% to 10% of gross receipts or $1 to $35 per square foot for other cannabis businesses.
But, cannabis businesses are currently not allowed citywide in Laguna Woods. If voters say yes to Measure T, it would not change the existing ban on those types of businesses, according to the city attorney; that would require a change to the Laguna Woods Zoning Code.
“It will only take effect if the City Council, after listening to our residents, decides in the future to allow a cannabis business in Laguna Woods,” councilwomen Cynthia Conners and Shari Horne said in a ballot argument written in favor of Measure T.
“This tax is not a ‘first step’ toward a cannabis business in Laguna Woods,” the pair said. “Approving a tax and approving a business are two independent questions. The city could approve a cannabis business without this tax. Or, the voters may approve this tax to protect our future interests, yet there may never be a cannabis business here, so the tax will never go into effect.”
State law allows for the recreational use of marijuana and the personal cultivation of up to six plants, but local cities are allowed to decide if they will permit any cannabis-related businesses. Laguna Woods does permit delivery services from outside the city’s jurisdiction to operate, as long as they are properly licensed and follow California laws.
Opponents of the tax noted the financial benefits are unclear.
While it is estimated the tax would generate about $750,000 per year if cannabis businesses were to operate in Laguna Woods, the actual figure would depend on the rate the City Council chose to implement within those voter-approved ranges.
Mayor Carol Moore argued the “regressive” tax would ultimately benefit the illegal marijuana market rather than encourage legal businesses.
“This ballot measure-proposed taxation would preserve the illicit market while sustaining social inequity,” Moore wrote in the opposing ballot argument. “It is minorities that have lost money trying to start and run a marijuana business, while corporations, as well as the illegal market, became winners. Sadly, this ballot measure abets that injustice by increasing costs for both retail and other businesses, and thereby putting the legal market further out of reach.”
But Conners and Horne maintained the tax would “protect our fiscal future from outside influences and special interests” should cannabis businesses be allowed to flourish in Laguna Woods down the road.
Chad Wanke, who is part of a partnership proposing a marijuana dispensary in the city, said Measure T’s approval in November by voters is “critical” to ultimately getting legal cannabis in Laguna Woods.
In 2020, a slim majority of Laguna Woods voters said they did support allowing both recreational and medicinal marijuana dispensaries to operate in commercially zoned areas of the city. The vote was only an advisory one, meaning it simply allowed voters to share their thoughts, not make any concrete changes to city ordinances.
A majority of Laguna Woods voters are needed to approve Measure T. Conners and Horne said this is the first time since the City Council was founded in 1999 it has put a potential new tax before voters.
Huntington Beach voters this year will also be tasked with deciding on a tax for potential cannabis businesses.
Source: Orange County Register
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