Tax on high potency Cannabis products sent back to Grass Valley staff for revision
Grass Valley City Council Temporarily Reduces Taxes on High-Potency Cannabis Products.
In an effort to support a new business working to be competitive in the area, consensus was reached by city council members in Grass Valley to decrease specific taxes on high potency cannabis products.
Ryan Haley and Cameron Brady, co-owners of Grass Valley Provisions, LLC (Provisions), contacted the City of Grass Valley requesting that specific taxes on high potency cannabis products be temporarily decreased.
Direction was given to staff to revise the proposal for another reading at the next regularly scheduled city council meeting April 9; the revised resolution should decrease the high potency tax to zero for five years, rather than two years originally proposed by Provisions in the development agreement.
The Council also rejected the development agreement proposed by the owners of the dispensary which included $10,000 for youth programs, such as sports, music, and anti cannabis education in Grass Valley.
Taxes will still be collected on the sale of cannabis products, but in keeping with the competitive legal market.
“Grass Valley Provisions is pleased with the Councils’ decision to support a competitive marketplace and temporarily suspend the fourth set of taxes, specifically the THC tax and the beverage tax, at zero percent. The first three taxes, the 8.5 percent sales tax, the four percent local excise tax, and the 15 percent state excise tax, will remain the same. Provisions looks forward to the opportunity to serve the City of Grass Valley and expects to open to the public on April 20th.” Cameron Brady, Chief Legal Officer told The Union.
A discussion regarding how aware of the details within the ordinance that Grass Valley voters approved were debated.
“What is key, though, is you are not eliminating the tax; you’re reducing it down to zero, and some council in the future would have the power to put it back changes…it’s just a resolution. We can’t change what the voters put in place. It’s not eliminated,” Tim Kiser, City Manager said.
Conversations between the councilmembers were a bit surprising when it came to the rejection of the agreement that included $10,000 from Provisions, according to Tom Ivy, councilmember.
Councilmember Bob Branstrom doubted the effectiveness that some youth programs have on cannabis use under the age of 21 years.
“I’m pretty skeptical of the efficacy of those kinds of things to keep kids off of cannabis. I mean, I grew up in an era where they had movies that were scaring people about Mary Jane,” Branstrom said. “Frankly, I don’t think kids listen to what governments tell them on issues like this.”
Branstrom told The Union that in his mind, rejecting the $10,000 offered by Provisions to the City made the issue less complicated, and that the time that City staff would have to spend to allocate the monies by the creation of grants and so forth, would hardly be worth it.
“The cost of administering the $10,000 would mean staff isn’t available to do other things,” Branstrom said.
Branstrom also told The Union that he wasn’t sure that legal cannabis businesses needed additional challenges, when currently the taxes and regulations for the legal production of cannabis are more rigid than the food we eat.
Ivy commented that at the time when the ordinance was passed, the key element that concerned voters was how to legalize marijuana in Grass Valley.
“None of my voters understood exactly what this fourth tax entailed,” Ivy said. “So fair points have been made all around.”
Diana Gamzon, executive director of the Nevada County Cannabis Alliance Fair Trade association representing over 200 businesses with a mission to provide advocacy and education to our local cannabis industry, spoke during the public comment period about the positive impact the reduced tax would have for Grass Valley businesses.
“We are very excited to be here as Provision takes the final steps in opening their doors,” Gamzon said. “Grass Valley is one of the only jurisdictions in the entire state that has such a tax… A consumer would be spending nearly 60 percent more to purchase the same product in Grass Valley than in Nevada City.”
Another public comment from Harry Bennett, who leads Nevada City’s “Floracy” cannabis extract manufacturing, told the Council that a large majority of products for purchase in a dispensary have more than the 17 percent THC potency mentioned in the tax ordinance.
Grass Valley’s been able to see the benefits of regulating cannabis including a grant that was awarded to Grass Valley for $3 million from Proposition 64 Health and Safety grant being used for recreation initiatives for sports, an improved skate park in Condon Park, and other needs of law enforcement and local schools, according to Gamzon.
“Anything over 17 percent includes probably 90 percent of the items in a dispensary,” Bennett said.
