Ballot Includes Measure C, the Cannabis Business Tax to Help Establish a Responsible Cannabis Market in Unincorporated L.A. County

LOS ANGELES – Today is the deadline for residents in California to register online to vote in November’s general election. The Los Angeles County Department of Consumer and Business Affairs (DCBA) encourages all eligible residents to register to vote in this important election. Election information is available from the L.A. County Registrar-Recorder/County Clerk’s office at lavote.gov.

There are several measures to vote on during this election, including Measure C, the cannabis business tax measure. Measure C, endorsed by the L.A. Times, would allow the County to tax cannabis businesses in the unincorporated areas of Los Angeles County. Revenues produced by this general tax would be directed to the County’s General Fund and may be utilized for a broad array of programs and initiatives to further support economic and workforce development in the County.

“Building a fair and effective regulatory cannabis program requires a multifaceted approach and we are eager to hear the community’s voice through their vote as they help determine the potential scope of an equitable cannabis program in their communities,” said DCBA Director Rafael Carbajal.

Earlier this year, the Board of Supervisors directed the Office of Cannabis Management (OCM), within the Department of Consumer and Business Affairs, to develop and implement an equitable commercial cannabis licensing program in the unincorporated areas of Los Angeles County. OCM’s recommended regulatory framework includes building a robust Cannabis Equity Program. The program will provide access to resources such as initial priority licensing, business development and technical assistance, pro bono legal assistance, access to capital, and other potential pathways to jobs, entrepreneurship, and ancillary economic opportunities within and outside of the cannabis industry. This program will help address the administrative barriers that create inequitable outcomes and calls for investments to bridge the gaps in educational, technical, and financial resources caused by systemic racism and exacerbated by the War on Drugs.

If Measure C is approved by voters, cannabis businesses would be taxed at the following rates starting July 2023:

Retail: 4% of gross receipts

Manufacturing:  3% of gross receipts

Distribution: 3% of gross receipts

Testing: 1% of gross receipts

Cultivation: $7/sf of canopy (indoor artificial light)

$4/sf of canopy (mixed light)

$4/sf of canopy (outdoor)[1]

$2/sf of canopy space (nursery)

Any other type of Cannabis Business:  4% of gross receipts

 

These are some of the lowest rates in the state, and they are designed to better promote the viability of the legal cannabis businesses. OCM recognizes the fast-changing nature of the cannabis regulatory and industry landscape, and the need for the County to adjust the tax rates to respond to a maturing, competitive and viable legal cannabis market in Los Angeles County. Accordingly, the proposed measure also allows the Board to decrease or increase the tax rates up to a maximum tax rate on cannabis businesses in the unincorporated areas of Los Angeles County after July 1, 2026.

Until LA County fully develops and launches its cannabis licensing program, all commercial cannabis activities, including retail, delivery, manufacturing, and cultivation, remain prohibited in unincorporated LA County. “The Office of Cannabis Management stands ready to fully implement a new program that will create a more responsible and sustainable cannabis market in Los Angeles County,” said Carbajal.

For more information about the Office of Cannabis Management, including updates on program development, upcoming public and stakeholder engagement meetings and a list of retailers that participate in LA County’s Cannabis Compliance and Enforcement Program, visit cannabis.lacounty.gov.

Eligible voters must register before midnight today (Monday, Oct. 24) to be mailed a Vote by Mail ballot. County residents who miss the Oct. 24 election registration deadline may still conditionally register and cast a ballot at any Vote Center in the County. In-person voting begins Saturday, Oct. 29.

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Since 1975, the County of Los Angeles Department of Consumer and Business Affairs (DCBA) has been the local consumer protection agency serving County consumers, tenants, homeowners, immigrants, and workers. DCBA provides a wide range of services that aim to foster a fair and dynamic marketplace and enhance the economic wellbeing of our communities. This includes investigating consumer fraud complaints, enforcing the County’s tenant and worker protections, and providing access to justice programs. More information can be found at dcba.lacounty.gov or by calling (800) 593-8222.

[1] LA County will not be permitting outdoor cultivation during its initial launch of cannabis business permits per its December 2021 report. However, should the Board of Supervisors move to permit outdoor cultivation at a later time, the appropriate rates will apply.