San Francisco Proposition D: Tax Increase on Cannabis Businesses | KALW

San Francisco Proposition D: Tax Increase on Cannabis Businesses

Sep 27, 2018

Proposition D is known as the Marijuana Business Tax Increase. The San Francisco Board of Supervisors put the measure on the ballot to add another tax onto cannabis businesses operating in the city.

The tax rate for cannabis in San Francisco is already around 25%; Proposition D would be in addition to that.

This new tax would affect cannabis businesses making over 500,000 dollars a year. They’d be taxed an additional 1 - 5% depending on the type of cannabis business they are, and how much they make. The new tax would not come into full effect until 2021. While there’s no organized NO on D campaign, the cannabis industry isn’t happy, and pushed for this delayed start; they’re concerned that higher taxes will push consumers back to buying cannabis through unregulated channels. Medical cannabis, and cannabis businesses who make less than 500,000 dollars would be exempt from this tax.

 

Supervisor Malia Cohen, who introduced this measure, points out that other municipalities already tax their cannabis businesses at a higher rate than what she’s proposing. However, if Proposition D passes, the board of supervisors would have the opportunity to raise the cannabis tax even more - up to 7%.

 

Proposition D is estimated to generate between 7 - 16 million dollars annually by 2021. The money would be deposited into the city’s general fund. It’s not yet certain what exactly this extra income would be used for, but Supervisor Cohen says she’d like to see the money go to providing loans for small businesses, workforce development, and public education.

 

So, a YES vote on Proposition D would levy a 1 - 5% tax on cannabis businesses making more than 500,000 dollars a year. A NO vote would leave cannabis taxes in the city as they are.