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San Francisco moves to delay its cannabis business tax to give legal dealers a boost

Budtenders at The Green Cross cannabis dispensary help customers in San Francisco, Wednesday, March 18, 2020.
Jeff Chiu
/
AP
Budtenders at The Green Cross cannabis dispensary help customers in San Francisco, Wednesday, March 18, 2020.

Updated December 6, 2021 at 8:11 PM ET

City officials in San Francisco want to delay the imposition of a tax on lawful recreational cannabis businesses to help them compete with illegal marijuana dealers.

"Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers," Supervisor Rafael Mandelman said in a tweet. "Now is not the time to impose a new tax on small businesses that are just getting established and trying to compete with illicit operators."

Last week the San Francisco Board of Supervisors passed an ordinance to suspend the Cannabis Business Tax for the 2021 and 2022 tax years.

The ordinance requires a signature from San Francisco Mayor London Breed before it takes effect. "Mayor Breed does intend to sign the ordinance once it passes the Board of Supervisors on a second reading tomorrow," the mayor's office told NPR.

In 2018, San Francisco voters approved the 1%-5% tax on cannabis businesses, which is scheduled to take effect next year, according to the San Francisco Examiner.

The tax relief could come as cannabis businesses in the Bay Area struggle to defend against a recent rash of robberies, some of which have turned violent. The losses from the crime spree are estimated to be at least $5 million, according to the cannabis industry site MJBizDaily.

Supporters of the ordinance, including the San Francisco Cannabis Retailers Alliance, told the Board of Supervisors that the cannabis industry is experiencing a drop-off in business following a boom during the early months of the COVID-19 pandemic, and that a tax hike would result in higher prices for consumers.

Copyright 2021 NPR. To see more, visit https://www.npr.org.

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