Like almost all cities in Orange County, Huntington Beach prohibits the sale of medical and recreational marijuana. Still, in a sort of preemptive strike, a ballot initiative addresses how to tax cannabis shops should they ever become a reality.
Huntington Beach’s Measure A would impose a special tax of up to 6% on the gross receipts of cannabis retailers. Non-retail cannabis businesses — such as testing labs and distributors — would be taxed at no more than 1%.
The taxes would be earmarked to fund police, homeless prevention, behavioral health services, and intervention programs.
However, Measure A requires a two-thirds super-majority. That means it needs the same kind of overwhelming support from voters that the proposal received from Huntington Beach City Council on March 1 when it voted 5-2 to put the initiative on the June primary ballot.
In the six years since California voters legalized marijuana use for adults 21 and over, only two Orange County cities have approved dispensaries. Santa Ana became the first in 2017. Costa Mesa voters chose to legalize cannabis sales there in 2020.
Huntington Beach Councilman Dan Kalmick, who placed the item on agenda, said the tax would be ready to go should the city ever allow cannabis to be sold.
“We’re giving voters the option to allow us at a future date to set a tax rate,” Kalmick said in March.
Meanwhile, he added, Measure A “implicitly” acts as an opinion survey to gauge interest in what might be the next logical step — legalizing cannabis sales.
The city’s staff report projected cannabis sales would generate $300,000 to $600,000 annually in tax revenue.
Councilmen Erik Peterson and Mike Posey opposed placing the measure on the ballot, arguing it puts the cart before the horse by failing to include legalization.
“Right now, you’re saying, ‘It’s a tax, it’s a tax,’” Peterson said. “It’s a tax on what?”
But Measure M proponents pointed out the majority of Huntington Beach voters, 52%, voted in favor of statewide legalization in 2016. By now, residents may be all the more comfortable with the idea — and with the tax revenue that marijuana sales would bring in.
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