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Lindsay council budges on pot, still excludes retail

Lindsay council budges on pot, still excludes retail

Lindsay City Council votes to put proposed cannabis tax rate on November ballot for manufacturing and testing cannabis businesses

By Paul Myers @PaulM_SGN

LINDSAY – While Lindsay prohibited commercial cannabis within the city limits over a year ago, city administration said there was still the opportunity to change course and allow for certain cannabis businesses. And since last Tuesday’s meeting the council seems to be ready to make that change. But that does not mean residents can look forward to walking into a cannabis retail shop any time soon.

In a unanimous 5-0 vote the council voted in favor of giving voters the option of accepting or denying a cannabis tax rate of 10% of gross receipts or $25 per square foot tax, per year for cultivators or other cannabis businesses. A staff report notes that the $25 per square foot tax will apply to growing cannabis. However, the 10% gross receipts tax will apply to all other stages of manufacturing, testing, etc. before the retail stage. 

As well staff reports on the item estimate a wide range of tax revenue noting they will estimate the haul to be between $500,000 and $3.5 million. But that would only be if they allow businesses into the city if the tax passes.

“The tax can remain on the books but nobody can allow the business in the city,” Lindsay city attorney Mario Zamora said.

If the voters pass the tax in November, the City would have the capability of taxing those businesses if they decided to let them in. And the tax does not necessarily mean the council would impose the maximum tax rate. Instead it would likely be far lower like Woodlake’s and Farmersville’s who have similar maximums but lower effective rates. The range is intended to give the Council the capability of periodically raising the rate by resolution.

“We have a great deal of latitude within the language for the council to set the price and not have to go to another vote,” councilmember Brian Watson said.

The potential additional revenue is a tough thing to turn down for Lindsay’s general fund, but city staff warns of additional cost.

“These revenues will come at an additional cost for public safety and other negative impacts on the community,” the staff report said.

Mayor Pam Kimball has long held her concerns over the industry, but was still the final vote in favor of putting the tax up to the voters.

“I think you all know I have my reservations about commercial cannabis in Lindsay but I am for putting it on the ballot,” Kimball said. 

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