One-Year Tax Break For Cannabis Industry

SAN FRANCISCO — The cannabis industry will receive a one-year tax break from San Francisco, as reported by The San Francisco Examiner on Thursday, November 5.

In November 2018, San Francisco voters approved a tax on cannabis. This new tax break will further delay its enforcement. Rafael Mandelman, who serves on the San Francisco Board of Supervisors, proposed the tax break, saying “in light of our efforts to support small businesses, this is not a time to be imposing a new tax on small businesses.”

He argues “many of these businesses have been paying rent on their empty locations for years and need time to grow their businesses and recoup some of these costs.”

Mandelman’s proposal was approved Wednesday, November 4 by the Board of Supervisors Budget and Finance Committee. On Tuesday, November 9, the entire board will be voting on it. If passed, the cannabis industry will receive a one-year tax break.

The COVID-19 pandemic has made it difficult, according to AnnaRae Grabstein, the NorCal Cannabis Company’s chief compliance officer. She says “we are not in an economic position to take on additional taxes that other businesses are not subject to in the midst of the pandemic.” A rise in taxes, Grabstein says, would “cause us to close or force us to relocate” outside San Francisco.

Taxes will be imposed on the cannabis industry starting January 1, 2021 unless the full board approves Mandelman’s proposal on November 9. Under his proposal, the cannabis industry will pay taxes after a year, starting January 1, 2022.