Cannabis businesses in Costa Mesa are getting a bit of a reprieve. After approval from the City Council, Costa Mesa has lowered its gross receipt tax for distribution, manufacturing, research and development of legal marijuana from 6% to 1%. Additionally, it has thrown out a tax on marijuana testing. The new ordinance went into effect April 16.
It’s a big win for the city’s legal marijuana industry. Last year, marijuana executives sent a letter to the city requesting a reduction in the excise tax to 2%. Marijuana advocates warned that the industry would be unable to compete under the previous tax system. An ad hoc panel was established to look into the matter.
The City Council approved the new ordinance in March. It was initially supposed to be temporary. However, circumstances—namely the COVID-19 pandemic—caused city leaders to reconsider and the tax reduction was made permanent.
Read more about the ordinance and public reactions at Voice of OC.