Visalia weighs cannabis tax as medical marijuana mandate looms

California could force cities like Visalia to allow cannabis dispensaries to operate. Visalia is looking to get ahead of the game and have a tax in place just in case.

Visalia is exploring a potential cannabis tax for the city despite not allowing any dispensaries to operate in town. 

The Visalia City Council is preparing for possible legislation from the state that would require cities to allow medical cannabis dispensaries to open up. 


The big picture: Last week the city council heard a presentation from consulting firm HDL on a possible cannabis tax. 

  • While all dispensaries are banned from selling cannabis in Visalia, the city does allow dispensaries from neighboring cities to deliver to Visalia residents. 
  • That comes in compliance with Senate Bill 1186, which took effect at the start of the year and prohibits cities from banning cannabis deliveries. 
  • A potential tax would allow Visalia to collect money from deliveries and any future dispensaries if the city ever chooses to allow retail storefronts. 

By the numbers: HDL estimates that Visalia could generate around $750,000 in revenue from a cannabis tax and fees for business licenses. 

What they’re saying: Councilman Steve Nelsen warned against making predictions that could be too high for what the actual tax revenue would be, based on how surrounding cities have performed. 

  • “I would be cautious on the revenue stream, because Woodlake didn’t hit their numbers, Farmersville hasn’t hit their numbers, the City of Tulare hasn’t hit their numbers,” Nelsen said. “So I don’t think we should go out pie in the sky and say we’re going to get $750,000 when in reality it’s only $500,000.” 

What we’re watching: If the city council moves forward with the tax measure, Visalia voters will have an opportunity to vote on it in November. 

  • Possible ballot language has already been put in circulation by polling firm FM3. It reads: “Shall the measure to fund, for general governmental uses, services such as: maintaining emergency response times; supporting youth programs; helping attract businesses; cleaning public areas; addressing homelessness; by taxing cannabis businesses’ gross receipts not exceeding 10% on retail, delivery, manufacturing/testing; raising approximately $1,000,000 annually, requiring spending disclosures, and which would only be levied if state law imposes mandates or the city approves an ordinance allowing such businesses, lasting until ended by voters, be adopted?” 
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