2022-078 - Adding Commercial Cannabis Business Activity Tax Rate

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D. In 2018, the City Council adopted Ordinance Nos. NS-2941 and NS-2942, allowing and regulating commercial cannabis businesses. E. A general business license tax based on the gross receipts derived from commercial cannabis businesses and where applicable gross square footage serves to generate essential funds for protecting vital City services and facilities and places such businesses on more equal footing with existing City businesses, including medical marijuana collective/cooperative (medicinal cannabis retail) businesses. F. The City Council is authorized to impose general and special taxes in order to fund municipal services and facilities, subject to requisite voter approval as set forth in Government Code section 53720 et seq. G. The voters of the City of Santa Ana approved Measure Y (Ordinance No. NS- 2962) on November 6, 2018, for the purpose of fixing the rate of taxation for commercial cannabis businesses including delivery, distribution, manufacturing, cultivation, testing and retail sales of cannabis and related products. The taxes required to be paid under this article are declared to be required pursuant to the taxing power of the City of Santa Ana solely for the purpose of obtaining revenue and are not regulatory permit fees. H. On September 3, 2019, the City Council adopted Ordinance No. NS-2972 amending certain sections of chapters 21 of the Santa Ana Municipal Code allowing vertical and horizontal integration of cannabis businesses; updating ownership transfers procedural standards and requirements, security deposits, and various administrative processes; updating and streamlining regulatory- components; reducing cannabis testing taxes to greater amount of one (1 %) percent of gross receipts or $1.50 per square foot; and adopting a canopy measurement and square footage allocation service fee. I. The City of Santa Ana desires to remain at the forefront of commercial cannabis by allowing and regulating commercial cannabis business activities, routinely updating and amending its ordinances, and establishing commercial cannabis gross receipts tax rates and square footages tax rates that are competitive and provide for the needs of the Santa Ana community. J. The City of Santa Ana has a compelling interest in ensuring that cannabis is not sold in an illicit manner, in protecting the public health, safety and welfare of its residents and businesses, in preserving the peace and quiet of the neighborhoods in which these businesses may operate, and in providing access to safe and tested cannabis to residents. To ensure safe and tested cannabis, the City desires to see the establishment and successful operation of cultivation, distribution, and manufacturing (including shared manufacturing and microbusiness) facilities in the City. K. Section 21-133(d) of Article XIII of Chapter 21 of the Santa Ana Municipal Code establishes initial, current, and scheduled commercial cannabis gross receipts tax and square footage tax rates by reference to the authorizing ordinances and resolutions, the content of which are presented in condensed tabular format as follows: Resolution No. 2022-078 Page 2 of 6