California City Lowers Marijuana Tax Rates

Time and again, cities have demonstrated the economic benefits of lowering cannabis tax rates. Now, it’s California City’s turn.

California City voted March 23 to lower tax rates for cannabis manufacturing and distribution. They'll drop from 6% to 1% for manufacturing and to 0.5% for distribution. Staff had proposed reducing tax rates on both manufacturing and distribution to 1%, but the Council was persuaded by industry officials to drop the distribution rate even lower.

The city heard from an array of cannabis business owners who said the current tax rate was making the city less competitive.

“The benefits of this potential revenue will ultimately benefit the residents by allowing the City a revenue source to improve parks, streets landscaping throughout the city and more job opportunities for local residents,” said City Manager Anna Linn (Antelope Valley Press). “It will also help to eliminate the special tax and absorb public safety to the general fund.”