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Ordinance Amendment No. 2022-01 - Commercial Cannabis Regulatory and Tax <br />Updates <br />September 20, 2022 <br />Page 5 <br />Table 1: Proposed Financial Amendments <br />Item <br />Impact <br />• An estimated reduction in the projected revenue in the range <br />of approximately $952,500 to $708,500 for FY 2023-24, <br />compared to actual receipts for FY 2021-22 of approximately <br />$2,310,000. <br />FY 2021-22 FY 2023-24 FY 2023-24 <br />FY 2023-24 Actual Revenue Revenue <br />REVENUE Revenue Estimate Estimate <br />ESTIMATE Received (Upper Range) (Lower Range) <br />CULTIVATION <br />$1,223,376 <br />$459,500 <br />$349,000 <br />DISTRIBUTION <br />$863,446 <br />$327,000 <br />$232,000 <br />MANUFACTURING <br />$215,152 <br />$166,000 <br />$127,500 <br />Total <br />$22 31� <br />$952,500 <br />$708,500 <br />• The foregoing non -retail commercial cannabis figures do not <br />include potential offsetting revenues which may be anticipated <br />from future shared manufacturing and microbusiness revenues <br />and from the enhanced natural growth of Santa Ana's non - <br />retail commercial cannabis business community which will be <br />encouraged by the rate reductions, and the simplification and <br />equalization of tax treatments for cultivation, distribution, <br />manufacturing, shared manufacturing, and microbusinesses. <br />At present, however, the City is lacking in sufficient information <br />to reasonably project such additional revenues. <br />• Likewise, the City may anticipate future increased revenues <br />from primary manufacturers and participating shared <br />manufacturers taking advantages of Santa Ana's proposed <br />favorable and administratively streamlined treatment of shared <br />manufacturers and the proposed relaxation and equalization of <br />the tax treatment as between manufactures and distributors <br />who are co -located, regardless of whether they are horizontally <br />or vertically integrated or not. <br />• Similarly, there will be an increased likelihood of formation of <br />microbusinesses based on Santa Ana's going -forward <br />equalization of microbusiness tax treatment, so that <br />microbusinesses will not have to include the annual $2,000 <br />basic tax rate assessment for each licensed category of <br />commercial cannabis business they choice to engage in, but <br />instead they will be liable to only pay once for the primary <br />City Council 25 — 5 9/20/2022 <br />