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Grover 'on track' to meet cannabis tax revenue projections

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Cash from the city of Grover Beach's commercial cannabis businesses is just beginning to roll in, and city officials appear to be satisfied with the initial returns on the city's newest industry.

GREEN FOR GROVER 805 Beach Breaks and two cannabis businesses generated $120,000 in tax revenue for the city of Grover Beach in the first quarter of the fiscal year. - PHOTO BY JAYSON MELLOM
  • Photo By Jayson Mellom
  • GREEN FOR GROVER 805 Beach Breaks and two cannabis businesses generated $120,000 in tax revenue for the city of Grover Beach in the first quarter of the fiscal year.

According to a recent financial report to the City Council, Grover Beach took in $120,000 in tax revenue from three cannabis businesses operating in the city between July 1 and Sept. 30, the first quarter of the 2018 fiscal year. Speaking with New Times, City Manager Matthew Bronson said those numbers indicated that the city would likely meets its projection of $700,000 in cannabis tax revenue by the end of the four-quarter fiscal year.

"At this point we would say we are on track for meeting that projection," Bronson said.

Currently, the city requires cannabis retailers to pay a 5 percent gross receipts tax, while manufacturing and distribution operations pay a 3 percent tax. Cultivation operations pay $5 per square foot of building area for the first 5,000 square feet, then $10 per square foot after that. Bronson said the first quarter revenue came from three cannabis businesses, including two retail storefronts and one manufacturing operation. Revenues are expected to increase as more cannabis businesses are permitted in the city.

The funds from the cannabis tax go into the city's general fund. Bronson said the money could be used for public safety, street repairs and maintenance, and other key community needs.

Grover Beach voters passed the cannabis tax at higher rates in 2016. The City Council voted to lower the taxes in 2018, partly over fears that the rate was too high and would drive away prospective businesses. Bronson said the industry appeared to be happy with the current tax rate.

"What we've heard is that our tax rates are reasonable and competitive," he said. "They are in line with other communities around us." Δ

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