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Ordinance Amendment <br />August 20, 2019 <br />Page 3 <br />No. 2019-01 — Commercial Cannabis Ordinance Updates <br />Table 1: Proposed Financial Amendments <br />Item <br />Impact <br />and cannabis products occurring within a single integrated cannabis <br />business from reportable gross receipts of cannabis businesses. <br />• Reduces the net negative effect of multi -level taxation. <br />Security Deposits (SAMC <br />Amendment: <br />Section 21-80, 21-80.1, 21- <br />86, and 21-136) <br />Amends Ordinance NS-2962 to allow a single security deposit to cover <br />multiple types of vertically/ horizontally integrated commercial cannabis <br />business activities conducted by the same ownership regardless of form of <br />business structure. <br />Impacts: <br />• Reduces overall security deposit requirement to a maximum amount of <br />$10,000. <br />• Allows two or more vertically/horizontally integrated cannabis <br />businesses to be covered by a single deposit. <br />• Implements well-defined processes for handling deposits, their <br />application, replenishment, and release as well as requirements for <br />close-out audits and other guards against loss of taxes due to transfer of <br />ownership or termination of business. <br />Alternate Square Footage <br />Amendment: <br />Tax (SAMC Section 21-133) <br />Amends Ordinance NS-2962 to allow certain vertically and/or horizontally <br />integrated commercial cannabis businesses to base their alternate square <br />footage tax calculations on measured allocated gross square feet rather <br />than total gross square feet. <br />Impact: <br />• Allows distribution and manufacturing cannabis businesses that are <br />vertically or horizontally integrated to report actual allocated square <br />footage utilized upon verification by the City in place total square footage <br />of premises. <br />Testing Laboratories <br />Amendment: <br />Reduce Tax Rate from 5 to <br />2 Percent <br />Amends Ordinance NS-2962 to reduce the gross receipts tax rate on <br />testing laboratories and testing facilities. <br />Impact: <br />• Allows the City to maintain its competitive position with regards to <br />cannabis testing which is the most mobile and easily re -locatable class <br />of commercial cannabis business. <br />75A-3 <br />