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Ordinance Second Reading - Commercial Cannabis Amendments <br />October 4, 2022 <br />Page 4 <br />Modification <br />FY22-23 (6 months) <br />FY23-24 (12 months) <br />Supply Side Reduction of <br />$892,500 <br />$1,480,000 <br />5% <br />Retail Rate Reduction of <br />$1,347,732 <br />$2,695,465 <br />1% <br />Qualified Social Equity <br />Range of <br />Range of <br />Commercial Cannabis <br />$1,277,417 to $2,554,835 <br />$2,554,835 to $5,109,670 <br />Retail Business Operators <br />(Social Equity Practices) <br />Adult -Use Rate Reduction <br />of 2% <br />Range of <br />Range of <br />Estimated Fiscal Impact <br />$3,517,649 to $4,795,067 <br />$6,730,300 to $9,285,135 <br />The City deposits commercial cannabis tax revenue into the General Fund. In compliance <br />with Ordinance No. NS-2959, the City then transfers two-thirds of the tax revenue <br />attributable to supply-side and adult -use retail, but not medicinal retail, to the Cannabis <br />Public Benefit Fund to pay for youth and enforcement programs. <br />The estimated June 30, 2023 General Fund balance available to spend is $6 million after <br />meeting the 18-percent reserve requirement. The estimated June 30, 2023 Cannabis <br />Public Benefit Fund balance available to spend is also $6 million. Therefore, at this time, <br />the potential loss of revenue does not necessitate FY22-23 spending plan adjustments. <br />As part of the FY23-24 budget process, staff will reassess revenue estimates and <br />available fund balance and provide recommendations accordingly, which may warrant <br />decreased spending plans for both youth and enforcement programs within the Cannabis <br />Public Benefit Fund. <br />EXHIBIT(S) <br />1. Ordinance (reflecting changes at first reading) <br />2. Ordinance (clean) <br />3. Resolution (commercial cannabis tax rates) <br />4. Resolution (medicinal cannabis tax rate) <br />5. Resolution (map of commercial cannabis eligible areas, number of annual <br />temporary consumption events, and community benefit, sustainable business <br />practices, and social equity plan template) <br />6. Recommended commercial cannabis tax rate adjustments table <br />Submitted By: Minh Thai, Executive Director of Planning and Building Agency and <br />Kathryn Downs, Executive Director of Finance and Management Services Agency <br />Approved By: Kristine Ridge, City Manager <br />City Council 22 — 4 10/4/2022 <br />