Sacramento County will get to vote on cannabis tax for unincorporated areas

A plan that could allow marijuana dispensaries in unincorporated parts of Sacramento County was approved on Tuesday by the Board of Supervisors, just two weeks after the county body rejected a similar proposal.

Voters throughout Sacramento County will now have a ballot question in November as to whether they are in favor of taxing cannabis businesses in the county’s unincorporated parts.

The taxes would be dedicated to helping the homeless, specifically the several thousand unhoused people that live along the American River.

If 66% of voters approve the measure, supervisors would then decide whether to approve cannabis businesses such as dispensaries, delivery services and cultivation facilities..

All county residents would be eligible to vote, including those in the city of Sacramento, where cannabis businesses are already legal, along with those residents of unincorporated areas of the county.

“We’re leaving revenue on the table, millions of it,” said Supervisor Phil Serna, “because the consumers that are purchasing their cannabis products are doing so primarily in the city of Sacramento.”

The city of Sacramento reaped more than $20 million in the fiscal year ending June 30 from taxes on cannabis businesses.

Voters statewide approved the sale of recreational marijuana in 2016, but individual communities had to pass their own ordinances allowing cannabis sales and other marijuana businesses. The city of Sacramento opted in, but the Board of Supervisors never allowed legal sales of marijuana or other businesses in unincorporated parts.

What changed in two weeks on the vote by the Board of Supervisors?

Back on July 12, three of the five supervisors approved the cannabis tax ballot question. However, a supermajority — four votes — was needed to place the issue on the ballot in November.

Tuesday’s vote was also 3-2. But a maneuver by Supervisor Serna, dedicating the weed taxes exclusively to helping the homeless, meant only three votes were needed. Previously, the tax money was to go into the county general fund., requiring the four-vote supermajority, but dedicated tax money requires only a simple majority.

The county expects between $5.1 million and $7.7 million a year would be raised from the tax on marijuana businesses and go intom the homeless fund, assuming they decide to allow dispensaries and other cannabis businesses.

The two dissenting supervisors were board Chairman Don Nottoli and Sue Frost.

They both expressed concern that the ballot tax referendum would not be decided solely by residents of unincorporated areas of Sacramento County, but also by residents of Sacramento, where dispensaries and delivery services are already legal.

Serna was joined by supervisors Rich Desmond and Patrick Kennedy in approving the measure.

One audience member Tuesday, Dianna Poggetto, executive director of the American River Parkway Foundation, applauded the supervisors for planning to direct cannabis tax money to help the homeless.

She said the parkway was “ground zero” for homelessness in Sacramento with an estimated 2,500 or more unhoused residents living along the bike and walking trail.

The county currently spends around $11 million a year in efforts to help the homeless, a relatively small part of its $3.5 billion general fund.

Under the tax referendum to be decided by the voters, the taxes for dispensaries in unincorporated Sacramento County could be up to 6%. Other cannabis taxes would be up to 4% for cannabis manufacturing, 3% for distribution, 2% for testing and 3% for cultivation..

The city of Sacramento has a straight 4% tax on marijuana businesses.

This story was originally published July 26, 2022 at 8:27 PM.