Needles council places alternative cannabis square-foot tax on Nov. ballot

The Needles City Council on June 11 voted to place an alternative cannabis cultivation square-foot tax on the Nov. 5, 2024 ballot and to consolidate the measure with the statewide election.

City staff described the proposal as an alternative to the existing cannabis gross-receipts tax and said it is designed to make revenue collection and compliance easier for the city. "We are proposing a $1.75-per-square-foot cultivation area of canopy tax, which is adjusted annually with CPI," the City Manager said. "It would apply only to cultivation and would not be imposed on a facility unless and until the council adopts a rate by ordinance."

Why it matters: staff said cannabis revenues have been a significant stream for core services, estimating roughly 36% of the current budget comes from cannabis receipts; the square-foot approach is intended to provide a more auditable, stable revenue source for public safety, parks, roads and senior programs. The manager told the council the measure would give the city an additional tool if gross-receipts enforcement proves difficult.

Key details: the ordinance placed on the ballot would allow voters to approve a maximum $1.75-per-square-foot tax on cultivation canopy. If voters approve the measure, the council retains discretion to set a rate up to that maximum at a later date. Staff told the council the rate would be adjusted each January by CPI, with an annual ceiling of 5% and a floor of 2% to preserve parity with industry conditions.

Procedure and council action: councilors moved and seconded readings and adopted the accompanying resolutions to place the ordinance on the ballot, to request consolidation with the county, and to authorize the city attorney to prepare impartial analysis language. Council also voted to appoint the mayor to file the city's official 300-word argument in favor of the measure. The roll-call vote on the measures was recorded as affirmative for all recorded members.

Next steps: the measure will appear on the Nov. 5, 2024 ballot if the county accepts consolidation; if voters approve, the council would later decide by ordinance whether and at what rate to implement the square-foot tax. The council also retained the option to continue using the existing gross-receipts tax instead of implementing the square-foot rate.

Votes at a glance: recorded yes votes on the resolutions and ordinance readings included Council members Campbell, McCor, Meritt, Jernigan, Po, Bel and Long (as recorded in the meeting roll calls).