Mad River Union
ARCATA – While considering different ways of generating revenue at last week’s Arcata City Council meeting, city officials decided to avoid weighing another tax on what some consider a considerably overburdened industry – cannabis.
After discussing the ways such a levy would be assessed with city staff, board members quickly shot down the conversation.
“I would not be inclined to support a tax on this industry at this time,” said Vice Mayor Michael Winkler. Councilmember Susan Ornelas agreed.
Council members expressed concern over whether the effect on local illicit growers’ decision to enter the legitimate market. Winkler recalled the policy after the repeal of the Volstedt Act, commonly referred to as Prohibition, where taxes on legal manufacturers were eased with the intent of marginalizing or largely eliminating illicit alcohol production. It worked.
Those operating in the canna-commerce space already get clobbered by state excise and cultivation taxes, county cultivation taxes and on gross receipts, as well as city permit fees.
The City of Arcata has made efforts to accommodate the burgeoning cannabis industry, including the creation of a business zone, the Cannabis Innovation Zone. Businesses in the CIZ are offered a streamlined permitting process with the city, which includes the issuance of Conditional Use Permits.