Cannabis Tax in Tracy to be Voted on in November

August 2, 2020 at 4:35 pm

Among the measures for Tracy voters to consider in this November’s election will be a general tax on cannabis and hemp businesses. The proposal is expected to net between $350,000 to $750,000 in revenue for the city’s general fund. There are at least 20 cannabis businesses in the Tracy area, most of them delivery-only.

Image courtesy of the City of Tracy

An almost identical proposal, Measure D, was also up for vote in 2018 and required ⅔ approval to pass. It was defeated, with 62.2% (16,187 votes) for yes and 37.8% (9,819 votes) for no. Cannabis businesses were still prohibited from operating in Tracy at the time, although regulations were being drafted to allow two delivery-only businesses. As a result, the projected revenue was considerably smaller than the current proposal at $35,000 to $100,000 a year. Additionally, the tax income was supposed to go to police and code enforcement rather than the city’s general fund.

This November’s measure requires only 50% approval to go into effect, making it likely to pass. The tax rates would depend on the type of business: $12 per square foot for cultivators, 6% for retailers, 2.5% for laboratories, 3% for distributors, and 4% for all other businesses. These rates would be maximums, with the City Council able to adjust the rates as they see fit. According to the Tracy Press, cannabis businesses with multiple licenses would have their tax rate capped at 15%.