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Council weighs changes to cannabis tax and permitting after revenue shortfalls and enforcement issues
Summary
Council and staff reviewed Measure P cannabis tax collections, a delinquent business, and options including raising the tax rate to cover permitting and enforcement functions; councilors raised concerns about promised school funding and suggested engaging the school board.
Cloverdale councilors reviewed the city’s Measure P cannabis tax report and discussed enforcement and possible rate changes.
Finance staff (Susie) told the council the cannabis tax report was included in the agenda packet and that one licensee is months past due; staff reported promises to collect outstanding amounts within days. Susie said raising the tax rate by 1 percentage point would cover the city’s annual permitting and audit costs and recommended eliminating an annual permitting process in favor of a slightly higher tax to reduce administrative burden. (Finance staff (Susie))
Council members questioned whether cannabis tax revenue was reaching schools as originally anticipated. One council member asked, "Is any of this tax money going to education of the schools?" and noted the ordinance had been discussed earlier in coordination with school officials. Staff responded that cannabis receipts flow to the general fund and that the current cannabis tax level covers roughly a fraction of a School Resource Officer (SRO) salary. (Councilmember (unnamed); Finance staff (Susie))
Councilors discussed enforcement: staff said they have revoked at least one license for nonpayment and will continue collection efforts. Several councilors urged staff to bring the issue to the council and to coordinate with school district officials to clarify the tax’s uses and the extent to which funds should support education or public safety.
The council requested staff follow up with a proposal to (1) consider a tax rate increase to better match original expectations for public‑safety or education support, (2) review the annual permitting requirement versus straight tax collection, and (3) continue enforcement actions against delinquent operators. No ordinance or tax change was adopted at the meeting.
