Long Beach may look at lowering taxes on some cannabis businesses, but how big the cuts end up being will have a big impact on the city’s annual budget, which is projected to receive about $12 million in taxes from the industry.
Long Beach’s current tax on cannabis cultivation is $12 per square foot, but the City Council could consider reducing that tax over the coming months.
Cannabis tax revenue finished $6.3 million over city projections, and the increase could be just a glimpse of what’s to come as the industry continues to grow in Long Beach.
The previous rate assessed was 6% but a vote by the City Council Tuesday will drop the city’s rate to 1% in the new year.
Reducing the tax rate from 6% to 1% could result in more businesses and more employees but also a hit to the city’s general fund.
One official said that if the city wants to ensure that it reaps the benefits from an emerging industry like cannabis, it needs to lower barriers to entry.
