Committee backs delaying San Francisco cannabis business tax through 2025 over industry concerns

The San Francisco Board of Supervisors’ Budget & Finance Committee on Nov. 9 voted 2–1 to forward an ordinance that would delay the imposition of a local cannabis business tax until Dec. 31, 2025. Chair Hillary Ronan moved the item to the full Board after hearing arguments from Supervisor Rafael Mandelmann and public commenters representing the legal cannabis industry.

Mandelmann told the committee the legal market in San Francisco is “not where I think any of us would want it to be,” citing a persistent illicit market, price volatility and federal tax treatment that prevents cannabis businesses from deducting ordinary expenses. He said the controller’s analysis and other reviews support aligning the local tax decision with anticipated state action in 2025.

Nick Menard of the Budget and Legislative Analyst office told supervisors that delaying the tax would push first recognized revenues to fiscal year 2026–27 and reduce projected journal fund revenues by $30,750,000 over the five‑year window shown in the office’s projection.

Small business callers urged the pause. “Legal cannabis businesses are already being squeezed for every penny,” said Jakari, CEO of California Street Cannabis Company, who asked supervisors to delay the tax until 2025. Johnny Delaplane of the San Francisco Cannabis Retailers Alliance said unregulated sellers undercut licensed retailers and that tax relief is necessary to keep legal shops open and preserve jobs.

Supervisor Chan said she was sympathetic to the industry but worried about committing to a three‑year revenue reduction at a time when city budgets are tight, and suggested a year‑by‑year extension tied to updated Comptroller projections. Supervisor Asha Safaei and Mandelmann urged a multi‑year pause to match state timing and to give legal operators a longer runway.

After discussion, the committee recorded two ayes and one no and forwarded the ordinance to the full Board. The vote in committee was procedural only; any final policy decision and adoption rests with the full Board of Supervisors. The ordinance as presented would amend the Business and Tax Regulations Code to suspend the local cannabis business tax through Dec. 31, 2025; the Budget & Legislative Analyst characterized approval as a policy matter for the Board.

What’s next: The ordinance is scheduled to appear on the Board of Supervisors agenda on Nov. 15 unless otherwise stated. The Board will receive the committee recommendation and can accept, amend or reject the ordinance.