Santa Rosa voters overwhelmingly support cannabis business tax

Santa Rosa voters overwhelmingly supported a tax on cannabis businesses Tuesday, an expected result given the lack of opposition from the fast-growing industry.

Final results showed Measure D with nearly 78 percent of the vote, even greater support than the county’s measure enjoyed in the March special election that authorized a stiffer tax on cannabis businesses in unincorporated areas.

Santa Rosa officials said the new tax was needed to help offset the cost of regulating the industry, which began taking root in the city last year.

To date, cannabis entrepreneurs have applied for permits to operate in at least 32 locations in the city, all of them in industrial districts.

The passage of Measure D authorizes the city to begin taxing marijuana businesses up to 8 percent of gross receipts, or $25 per square foot of growing area for marijuana businesses, although the city plans to start with much lower rates. That’s lower than the 10 percent ceiling approved by the county, one of the reasons the industry was less opposed to Santa Rosa’s tax.

Another was the city’s willingness to lock in the rates for two years, viewed by the industry as crucial to providing some predictability. The county’s initial tax rates are not locked, and industry groups worried about their ability to predict increases.

You can reach Staff Writer Kevin McCallum at 707-521-5207.