HomeMy WebLinkAbout5/2/2023 Item 8a, Bishop
Wayne Bishop <
To:E-mail Council Website
Cc:Fuchs, Alex
Subject:SLO City Cannabis Taxes
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Hello Council,
Wayne Bishop here from 7 Points.
I would like to elaborate on the cities tax structure for cannabis operations. Currently the city has a flat fee of
$44,309.53 per year for Retail, Manufacturing, Cultivation and Other Business licenses. Pluss a one time application fee
of $26,698.87 and a finial application fee when permits are issued of $21,011.78, and a initial application fee of
$5,687.08. In total a potential cannabis business would have to outlay $97,707.26 just to obtain the permits to open a
business in the city in permit and application fees. Not to mention all the additional operational and state compliance
and reglatory fees in opening a business that can be in the hundreds of thousands of dollars if not in millions of
dollars. In my opinion and over 4-years of day to day experience operating a large cannabis cultivaion and mobile
dispensary business in Woodlake, CA, the SLO fees are not competitive and are overburdened on a industry that is
already over taxed and over regulated and on the brink of collapse.
Our annual mobile dispensary license in the city of Woodlake, is $10,144 and if I combined with my cultivaion license
then we obtain a 10% fee reduction, bringing my mobile dispensary license to $9,129.60. This is more reasonable
annual license expenses and should be considered by council. Also my application fee for a non-store front retail is
$537.00.
In addition, not all cannabis license fees should be the same as the operating cost and margin are very different amongst
the operations. As example, a store front has less operating cost and more margin that a non-store front mobile
dispensary.
The cost of compliance that the city is enforcing is not in line with the compliance risk assosiated with maintaining these
business. The city of Woodlake only conducts annual inspections, (not quarterly inspections like the city of SLO and with
outside consultants) and inspections are done with city personal to reduce cost. This should be something the city of
SLO should look into and perhaps indorse.
This cannabis industry is on the brink of financial collapse from over regulation and over taxation and with no corporate
write offs, we only get COGS and this is challenging at best. Governor Newsom finally recognized this over taxation and
took affirmative action and eliminated all cultivation taxes for the 3-years so the legal operators could compete with the
illicit market. He also reduced excised taxes at the same time. San Francisco, is the most expensive city to operate in
and has completely eliminated all cannabis taxes to aid in the recovery of the industry. The truth is, every dollar paid by
legal market, only strengthens the illicit market, as the illicit market does not pay taxes and has no compliance
liability. We have come to far in legalizing cannabis in the state of California to lose it to the illicit market due to over
burdensome taxes and regulations and permit fees. So far 25% of the California licensed cannabis canopy has been
eliminated and is no longer in operation due to financial distress.
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Since SLO regulated cannabis, it has not been successful in creating a environment to bring in business. In fact, cannabis
business have left due to how expensive it is to operate within the city.
I urge council to reconsider its tax base and to lower it in a way to create a strong and healthy cannabis industry, and
become more efficient in compliance and dollars assosiated for permit holders to absorb. You have a stake in this
industry and so do we…so lets work together to make it survive and prosper!
Kind regards,
Wayne Bishop
CEO 7 Points
Wayne Bishop
CEO
661.378.4555
wbishop@7points.biz | 7points.biz
19535 Ave 344 , Woodlake , 93286
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