Cannabis tax to land on Mountain View’s November ballot
Mayor said city will likely receive $1 million in annual revenue from 9 percent tax on maximum of five businesses
Mountain View voters will decide in November whether the city should impose a special tax on marijuana businesses that may start operating by early next year.
If approved, the cannabis tax would be the second one in Santa Clara County after San Jose’s, which kicked in at the start of this year.
The City Council on Tuesday authorized placing a measure on the Nov. 6 ballot that would tax recreational cannabis businesses up to 9 percent of their earnings, ostensibly to be spent toward public safety and city services.
Mayor Lenny Siegel said Thursday that although the council may initiate a 9 percent tax, the ballot’s wording
would allow the percentage to be lowered later without requiring another vote by residents. San Jose has a 10 percent cannabis tax.
Siegel said staff this October will present the City Council with a draft ordinance setting the number of recreational marijuana dispensaries and pot delivery businesses allowed. The tax would take effect when the businesses receive their licenses, expected to begin in January.
“I actually voted for an unlimited number and let the market decide,” Siegel said. “Given our demographic, we expect a lot of sales (from) young, affluent tech workers.”
Staff estimates five businesses would generate $1 million for the city.
The mayor said cannabis retailers probably set up shop downtown and delivery businesses in industrial areas. Operations will also be allowed in commercial areas outside of downtown.
Siegel said he is talking with two potential applicants who are trying to buy sites downtown. One of them wants to operate a high-end edible chocolate store.
Potential business owners would have to pass background checks and demonstrate a certain degree of financial stability, Siegel said. He said he doesn’t anticipate an increased need for police response. For one thing, no cannabis businesses will operate near schools.
“The idea is we’ll raise money to be used to address the consequences of legalization, but many of us think legalization will make things better … because the businesses will be regulated like any other business,” Siegel said. If that holds true, the revenue would mostly go toward transportation projects, libraries, park maintenance and senior services.
The local business community appears to be lining up behind a regulated cannabis industry.
“We’ve been a supporter of the cannabis tax, we feel it’s going to generate some revenue for the city (and) I think it’s going to be a little bit more than $1 million,” said Bruce Humphrey, president of the Mountain View Chamber of Commerce. “Regardless of how you feel
about the use of cannabis, if you’re going to sell it you need some mechanism to collect tax.”
Humphrey said he hopes some of the revenue will help finance transportation improvements. The
city is exploring ways to transport people from the downtown transit center to new employment areas in the North Bayshore Area, where nearly 20,000 housing units are projected to be built.
Two recent surveys the city conducted found that roughly 70 percent of likely voters favor a cannabis sales tax.