Recreational cannabis tax passes; privacy measure, arts fund OKd

A San Francisco measure to impose new taxes on recreational cannabis businesses sailed to a clear victory Tuesday, garnering over 66 percent of the vote with almost all precincts reporting.

Proposition D will levy a gross receipts tax on pot shops of 1 percent to 5 percent, depending on whether the business is a retail operator and how much gross revenue it takes in.

The first $500,000 of gross receipts from sales of recreational cannabis will be exempt from the tax, as will retail sales of medical cannabis. The tax will generate $5 million to $12 million beginning in 2021, when the measure kicks in. The money generated from the tax will go into the city’s general fund.

The measure also includes a provision allowing the city to tax out-of-town companies with online transactions in San Francisco that exceed $500,000 starting Jan. 1. The tax on online sales is not limited to cannabis businesses.

The Board of Supervisors will have the power to increase or decrease the cannabis tax after it goes into effect. The board voted 8-3 to put Prop. D on the ballot, with Supervisors Jane Kim, Rafael Mandelman and Hillary Ronen opposing the measure. Because it will send the new tax revenue to the general fund, it required a simple majority vote to pass.

Proposition B

Proposition B, which will provide guidance to city officials as they consider creating laws, policies and practices that might involve the collection, storage and sharing storage of people’s personal information, won with nearly 57 percent of the vote.

The policy requires the city administrator’s office to come up with an ordinance inspired by 11 privacy-centric principles, including contacting people when their personal information is collected or shared and retaining personal data for the minimum length of time necessary to accomplish “a lawful and authorized purpose.”

The ordinance applies to city officials, companies with which the city contracts, and third parties that obtain permits, grants and licenses from the city. It needed a simple majority to pass.

Proposition E

Proposition E, which won handily with over 74 percent of the vote, will send a portion of the revenue from the city’s tax on hotel room stays to fund arts and cultural programs.

The link between the city’s hotel tax and funding for the arts was established in 1961, with the rationale that fostering a dynamic and flourishing arts scene would make the city more enticing to tourists.

But the link was severed in 2013 over concerns that, because the tax had never been put to voters, it could be vulnerable to a legal challenge.

The city applies a 14 percent tax on hotel room rentals — an 8 percent base tax and a 6 percent surcharge. Prop. E allocates 1.5 percent of the money raised from the base tax to fund grants to arts and cultural programs and individual artists. Prop. E needed a twothirds vote to pass.