Voters show overwhelming support for cannabis tax, what it means for Redding

An overwhelming approval for Measure C, the Marijuana Business Tax, in Redding means all recreational and medicinal cannabis will face an added tax.

Redding City Manager Barry Tippin said most businesses in Redding have some sort of tax and the cannabis business tax is not different from other cities in California who are adjusting to the cannabis industry.

The tax is one percent lower than the six percent the City of Shasta Lake established for their cannabis retail businesses, which brought in nearly $388,000 in the second quarter.

Tippin said they'll start with a five percent tax on money made on marijuana sales.

"In terms of this industry, they are being taxed throughout California as a way to help with the regulatory element of a new business so the City of Redding is just following suit with many other cities," Tippin said.

The tax includes cannabis cultivation, manufacturing, processing, laboratory testing, delivery, storage, distribution, and retail sale up to 10% of gross receipts. However, the Redding City Council chose a five percent tax to work with local businesses.

"We have certainly started with taxes at a lower end from what could be because we want to make sure that they are successful. As they get into business and they have start up costs, just like any other business, we want to try to not make it a burden to begin with while still making some revenue for the City. We're hopeful it will be compatible moving forward," Tippin added.

The City does not know the exact amount the tax will generate, but they estimate $750,000 annually.

The revenue will go into the City's General Fund. Tippin said until the City Council sees the results of the tax there are no immediate plans on how the money will be spent.

However, more than 80 percent of the City of Redding's General Fund goes towards public safety, meaning both fire and police, and Tippin said it is very likely the City Council will do something similar with the revenue generated from the Marijuana Business Tax.

Separate from the tax, Tippin said the fees from cannabis business licenses, etc. will go towards a new city fire inspector position and educational resources on marijuana, which will mainly be in the form of public service announcements done with the County and the health department.

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