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Why San Francisco cannabis retailers could get a tax break

To help cannabis stores compete with the illicit cannabis market, officials want to put a hold on a new tax on licensed retailers, reports NPR.

“Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers,” wrote Supervisor Rafael Mandelman on Twitter. “Now is not the time to impose a new tax on small businesses that are just getting established and trying to compete with illicit operators.”



The background

The 1%-5% Cannabis Business Tax was approved in 2018. City officials voted to suspend it for 2021 and 2022 last week. The ordinance still needs a signature from the mayor, London Breed, who has signaled they do plan to sign it on second reading. 

Cannabis crime-sprees

Bay Area cannabis stores have endured a series of sometimes-violent robberies through the pandemic, losing an estimated $5 million as a result of the crimes. 

According to the San Francisco Retailers Alliance, there’s been a drop in sales in 2021, and the tax would drive prices up for consumers. In a letter to city officials, they also pointed out that compared to other types of businesses, the tax rate is unheard of.

“No other business in San Francisco pays such a high tax rate.”

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