Start of cannabis business tax postponed

San Francisco city officials want to postpone a tax on legal recreational cannabis stores to help them compete with illegal marijuana dealers.

"Cannabis companies create good jobs for San Francisco residents and offer their customers safe, regulated products," Supervisor Rafael Mandelman said in a tweet. "Now is not the time to put a new tax on small businesses that are just getting started and trying to compete with illegal providers."

Last week, the San Francisco Board of Directors passed an ordinance suspending cannabis business tax for tax years 2021 and 2022.

The ordinance must be signed by the Mayor of San Francisco, London Breed, before it comes into effect. "Mayor Breed intends to sign the ordinance as soon as she passes the board of directors on second reading tomorrow," the mayor's office told NPR.

In 2018, San Francisco voters approved the 1% to 5% tax on cannabis companies, which the San Francisco Examiner says will come into effect next year.

The tax break could come as Bay Area cannabis companies struggle to defend themselves against a recent wave of robberies, some of which have turned violent. The crime wave losses are estimated at at least $ 5 million, according to cannabis industry website MJBizDaily.

Proponents of the regulation, including the San Francisco Cannabis Retailers Alliance, told the board that after a boom in the early months of the COVID-19 pandemic, the cannabis industry was seeing a decline in business and that a tax hike would result in higher prices for consumers.