Adult-use cannabis businesses have been successfully operating in South Lake Tahoe for the last two and a half years. The regulations placed on their operation are working. Local cannabis businesses have generated funding for the economy, not attracted crime, patients have had better access to medication, and few residents have reported problems.

Cannabis businesses are generating approximately $950,000 per year for the city through 6 percent gross receipts and $20 per square foot cultivation fee. The fee funds city services including wildfire prevention, snow removal, road repair, and other general services. Additionally, the City has adopted a policy to use up to half of the revenue to support local non-profits. This year, the City granted $400,000 to 14 non-profits to create a better community for all residents. Supported non-profits include the Family Resource Center, Lake Tahoe Unified School District, and Tahoe Youth and Family Services.

The City Council has placed Measure G on the November ballot for voters to consider. We have received some questions about Measure G, and I wanted to take the opportunity to address some of those questions here.

Measure G would convert the City’s existing cannabis annual fee to a comparable 6 percent gross receipts and $20 per square foot cultivation tax. The measure would also streamline revenue collection for the City and cannabis businesses by removing the annual administrative development agreement review process. This tax is a local business and professions tax
authorized under state law and is applicable only to cannabis businesses. It is not a sales tax, but similar to the current fee, cannabis businesses may choose to pass this tax onto consumers. Because the amount the City collects would not increase if Measure G passes, South Lake Tahoe cannabis consumers are not likely to notice a difference.

Measure G will not impact any other existing cannabis regulations in the city or the funding available for local non-profit organizations that service our community. Measure G will also ensure that visitors who come to South Lake Tahoe and buy cannabis will continue to support the economy and contribute to the local services they use.

If Measure G passes, it will establish a voter-approved cap on the tax the City can charge. Thus, in addition to reducing administrative costs, Measure G would provide flexibility for the City to reduce the local tax amount if needed to ensure the competitiveness of our local businesses or to fight competition from black market cannabis dealers. Measure G would also provide
certainty to cannabis businesses that the tax would not increase.

All funding will continue to be required to be used for the benefit of South Lake Tahoe and cannot be taken by the State.

If Measure G is not enacted, there will be no changes to the cannabis fee until current development agreements expire between 2029-2030. When the current development agreements expire, the fee could be increased, decreased, or eliminated. During the 10-year terms of the development agreements, the fees charged to cannabis businesses annually would be neither reduced nor increased.

We hope you will participate in the election this November! Ballots will be mailed out soon.

If you wish to speak to the City directly or have a member of staff present to your civic organization’s next meeting on Measure G and the upcoming election, please contact us at publicrelations@cityofslt.us.

For additional factual information about Measure G, please visit www.cityofslt.us/MeasureG.

– Mayor Devin Middlebrook