Special South Lake Tahoe City Council meeting Monday

There will be a special meeting of the South Lake Tahoe City Council on Monday, June 2 starting at 9:00 a.m. in Council Chambers at the airport.

Cannabis is the topic of the main reason for the meeting, both a vote on a tax measure for the November ballot and a public hearing on the zoning and regulations of adult use cannibus businesses and the medical marijuana dispensary.

With the legalization of cannabis sales, the State imposed a dry weight tax ($9.25 for every ounce of cannabis flower and $2.75 for every ounce of cannabis leaf), a 15 percent excise tax, and a sales tax and local sales tax (if applicable) on non-medical sales. The State left it up to local jurisdictions to approve an additional local tax on cannabis businesses.

City staff is recommending to Council they adopt a tax that will go into the general fund, and one that sets different amounts depending on the type of cannabis business - retail sales, cultivation, microbusiness or testing lab. They are providing to Council several tax rates from a very conservative one ($7 per square foot for cutivation, 2.5 percent tax on microbusiness, 4 percent for retail sales and 1 percent for testing labs) up to an agressive tax ($10 per square foot for cultivation, 4 percent on microbusiness, 6 percent on retail sales and 2.5% on testing lab permits).

An initial tax on businesses will also be considered, one with annual payments required.

If a tax rate is approved it will go onto the November 6 ballot where it will need a simple majority.

Staff and City's consultant Hdl Companies estimate voter approval of a cannabis tax based on two cultivation permits, two microbusiness permits, two retailer permits and unlimited testing labs will generate between $435,000 to $700,000 in tax revenue. The range is based on the use of tax percentages ranging from 1 percent to 6 percent.

But, what may cloud things in November is a statewide ballot iniative called the "California Tax Fairness Transparency and Accountability Act." This would require all taxes to be approved by two-thirds of the voters, not the simple majority and it would require those asking for the tax to state exactly how the funds will be spent.

If this measure passes at the state level it could repeal what local voters decide, so the City Council may choose to pursue a special Cannabis Business tax (requiring a two-thirds vote) instead of the general Cannabis Business tax (requiring a simple majority).

The public hearing on Cannabis Use Permits, and Public Safety License Ordinances and Regulations.

The Council reached concensus on issuing four types of licenses:
Two (2) Adult-Use Retail Businesses
Two (2) Cultivators (limited to less than 5,000 square feet of grow area)
Two (2) Microbusinesses
Unlimited Testing Facility/Lab licenses

The public safety license ordinance would require an applicant to submit an application and fee, submit to a criminal background check, and submit a security plan. All employees would also be required to submit to a background check.

The new ordinances will regulate the sales, cultivation, manufacturing and testing of medical and adult-use cannabis in order to ensure the health, safety, and welfare of the residents of the City of South Lake Tahoe. These Ordinances require that any person and/or entity wishing to operate a cannabis business to:

(1) apply for a development agreement,
(2) apply for and obtain a
cannabis public safety license ("PSL") from the Police Department,
(3) apply for and obtain a Cannabis Use Permit ("CUP") from the Development Services Department, and (4) operate pursuant to an approved development agreement.