SDCTA Supports Measure N WITH CONDITIONS (Nov 2016) - "Non-Medical Cannabis Business Tax"
Taxes on a good such as marijuana that has social costs can be beneficial if more funds are to be used for regulation, prevention, or other forms of offsetting the externalities created by the legalization of marijuana in the City. SDCTA supports Measure N on the condition that in the future, the City recognizes and specifies that recreational marijuana is different than other goods so that the tax does not appear arbitrary. Furthermore, the City should devote additional resources to law enforcement and prevention activities to try to offset, to the best of its ability, the costs brought about by legalization. Lastly, the City should commit to conducting research to determine the ideal tax rate on recreational marijuana so as to minimize illegitimate and illegal activity in the marijuana industry. SDCTA notes that gross receipts taxes and "sin" taxes have both been shown to have negative economic consequences, and hopes that the City will address the discrepancy between the tax rates for medical and recreational marijuana.