Committee refers cannabis gross‑receipts tax deferral to full Board without recommendation, asks for stakeholder work

The Budget and Finance Committee on Nov. 17 referred to the full Board (without recommendation) an ordinance to suspend the city’s cannabis gross‑receipts tax through Dec. 31, 2022. Staff presenting the measure said it responded to continuing industry fragility, substantial illicit market share, and high federal/state tax burdens that reduce the legal market’s competitiveness.

Tom Temprano, speaking for Supervisor Mandelman, said the ordinance would give the local industry more time while the committee and officials develop evidence‑based tax recommendations for 2023. Supporters who called in — labor unions, cannabis retailers and trade groups — urged the suspension and asked for a joint working group to recommend a fair and workable local structure ahead of any tax imposition.

Fiscal effect: The Budget Legislative Analyst estimated a revenue reduction of $8.8 million for FY2022–23 if the tax is suspended through Dec. 2022; the mayor’s budget office and the controller explained the timing of receipts means the impact would be felt in FY2022–23, not the budget year then underway. Committee members asked for a stakeholder process and analysis of administrative timing, state taxes and illicit‑market dynamics before a final Board decision.

Outcome: The committee referred the matter to the full Board without recommendation and requested the sponsor convene stakeholder work (industry, labor, controller, treasurer tax collector, Office of Cannabis) to produce a recommended rate/structure for potential adoption in 2023.