San Diego supervisors set lowest cannabis tax rates in the county

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In an effort to keep marijuana businesses in the backcountry competitive, supervisors set their cannabis sales tax rate at 2 percent.

Cannabis dispensaries in San Diego’s backcountry will pay some of the lowest taxes on such businesses in the county, after the Board of Supervisors set tax rates they said would allow the businesses to compete with those in neighboring cities.

Under the new system, cannabis businesses in unincorporated county areas will pay up to $7 per square foot for cultivation, as well as 2.5 percent for manufacturing, 1 percent for testing and 2 percent for distribution and gross receipts of retail sales. County staff had recommended taxing retail sales at 4 percent, but supervisors voted to reduce that to 2 percent.

The adopted rates, particularly for retail sales, are among the lowest in the county. By comparison, Chula Vista taxes marijuana cultivation at $25 per square foot, and all other operations at 7 percent. The city of San Diego taxes retail at 8 percent and everything else at 2 percent. La Mesa, Lemon Grove, Oceanside and Vista set cannabis retail tax rates between 4 and 7 percent.

“You must enforce the law or lower taxes to combat the illicit market,” he said. “We need to keep taxes as low as possible.”

 

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