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Berkeley approves tax relief for legal cannabis businesses for next 2 years

Growing concerns about California's cannabis industry
Growing concerns about California's cannabis industry 01:57

BERKELEY – It's now cheaper to buy legal cannabis in Berkeley.

In a unanimous vote last week, the City Council passed legislation that temporarily exempts the city's medical and recreational cannabis businesses from the collection of cannabis industry-designated taxes.

The exemption, which will be retroactive to January 2023 and last until July 2025, is an attempt to keep legal cannabis businesses alive in Berkeley and curb illicit activity. Cannabis is legal in California for individuals older than 18 for medical purposes or 21 and older for recreational use.

Instead of paying the previous tax rate—which was $25 per $1,000 of gross receipts for the calendar year—both medical and recreational cannabis businesses will instead pay the business license tax rate that most closely represents the nature of its operations, such as retail or manufacturing. This means that cannabis businesses will not pay more in taxes than non-cannabis businesses of the same type.

"Berkeley is the home of legal cannabis; we need to make sure the industry survives," said Berkeley Vice Mayor Ben Bartlett, who introduced the tax exemption. "Let's not tax it to death."

Some cities in Alameda County have set high tax rates for the cannabis industry, leading to an exodus of businesses to jurisdictions with lower taxes, according to a press release from Bartlett.

Other cannabis businesses have been forced to close, driven out by the illegal market.

Currently, over two-thirds of cannabis purchased in California is in the unlicensed market because it's less expensive, according to the press release.

By making legal cannabis more affordable, the tax exemption aims to increase access to "safe, tested cannabis for Berkeley's residents and visitors," the press release read.

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