TELL OAKLAND TO LOWER THE CANNABIS TAXES!

OAKLAND FINANCE COMMITTEE ON TUESDAY MAY 14TH AT 9AM, OAKLAND CITY HALL

Oakland City Council is finally ready to maybe lower the cannabis taxes. This year’s City budget is due at the end of June. Cannabis tax is getting a little complicated. The Finance Department is recommending continuing the current 10% tax! Councilmembers Dan Kalb and Rebecca Kaplan have suggested a system with different rates for retail, cultivation/manufacturing, and distribution/transportation/testing labs, basically, all capping at 5%, except distribution at 3%. That moves in the right direction but it doesn’t go far enough.

This item will be before the Finance Committee on Tuesday May 14th at 9 am sharp.

OCEP has moved up from our original 1.5% cap recommendation, which was based on the San Francisco tax. We now suggest a similar system, but with lower numbers capping out at 2.5% for cultivation/manufacturing, 2% for distribution, and 4% for retail. These rates will do the most to secure the future of the Equity Program by giving Equity and small businesses some of the most competitive tax rates in the State. And they will super-charge Oakland’s future cannabis industry into the billions. See the charts below comparing OCEP, Kalb/Kaplan, and Finance’s proposals.

Your voice is important. Councilmembers really listen to what they hear from regular Oakland voters and business owners.

call and email the Finance Committee members and ask them to do the following:

·       Accept the revised OCEP proposal now with the higher taxes up to 2.5%.

·       Be sure to include a 0% tax bracket up to the first $500k of gross receipts to help our Equity and small businesses.

·       Don’t follow the Finance Departments 10% advice, it will cause massive failure and exodus of Oakland cannabis businesses.

·       Councilmember Kalb and Kaplan’s recommendation is moving in the right direction, but it doesn’t go far enough.

Please contact the Finance Committee and their Staff by email:

·       Committee Members:  dkalb@oaklandca.gov, mfortunatobas@oaklandca.gov, lmcelhaney@oaklandca.gov, sthao@oaklandca.gov

·       Staff: oluby@oaklandca.gov, mchen@oaklandca.gov, nlin@oaklandca.gov, LSalaverry@oaklandca.gov, amarqusee@oaklandca.gov, zwald@oaklandca.gov, lmoua@oaklandca.gov

And leave a voice message with Council Offices as well!

District 1-Dan Kalb                                                      510-238-7001

District 2-Nikki Fortunato Bas                                 510-238-7002

District 3-Lynette Gibson McElhaney                   510-238-7003

District 4-Sheng Thao                                                510-283-7004

Please join us at the Finance Committee on Tuesday May 14th at 9 am sharp and fill out your Speaker’s Card at http://bit.ly/oaklandspeakerscard.

 

2019 Oakland Cannabis Tax-Reform Proposal Comparison

Each bracket (except for one category described below) is taxed in addition to the previous bracket’s tax.

Screenshot 2019-05-09 20.32.39.png
Screenshot 2019-05-09 20.30.03.png
Screenshot 2019-05-09 20.32.48.png

*The Current Rates that the City of Oakland - Finance Dept. wishes to keep are 5% Medical and 10% for Adult Use. In 2018 the Revenue Dept. used a ratio of approx. 8.6% (between the med/A.U. rates) to tax cannabis businesses, based on the weighted average gross receipts for both types. The cannabis market in 2019 has shifted to become almost completely Adult-Use and the future ratio will be very close 10%.

** The 5% rate under Kalb and Kaplan’s plan for retail-gross receipts over $5 million excludes marginal rate, meaning that the entire $5million is taxed at 5%.

*** OCEP is advocating for a tax exemption for businesses generating under $500k like San Francisco to support equity applicants and small businesses.