City officials in San Francisco are seeking to delay the imposition of a tax on lawful recreational cannabis businesses.
The move is intended to help the legal nascent legal cannabis market compete with illegal marijuana dealers.
“Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers,” supervisor Rafael Mandelman said.
“Now is not the time to impose a new tax on small businesses that are just getting established and trying to compete with illicit operators.”
Last week the San Francisco Board of Supervisors passed an ordinance to suspend the Cannabis Business Tax for the 2021 and 2022 tax years.
Supporters of the ordinance, including the San Francisco Cannabis Retailers Alliance, have given evidence to the Board of Supervisors that the cannabis industry is experiencing a drop-off in business following a boom during the early months of the COVID-19 pandemic, and that a tax hike would result in higher prices for consumers.
The ordinance requires a signature from San Francisco Mayor London Breed before it takes effect- though this is not considered a major obstacle.
In 2018, San Francisco voters approved the 1%-5% tax on cannabis businesses, which is scheduled to take effect next year.
Cannabis is a huge potential emerging risk for the insurance market in the US. Indeed, earlier this year broker New Dawn Risk published a white paper on insurance for the US legal cannabis, CBD and hemp markets.
The report, Opportunity knocks at last in the US cannabis insurance market, urges insurers to consider how they can meet the market’s needs once they are legally allowed to write the risks.
Since the publication of the previous report in 2020, US sales of medical and recreational cannabis have grown exponentially, reaching $17.5 billion in 2020, a 46 percent increase from 2019.
In addition, the legislative landscape in the USA has been transformed by the arrival of the pro-cannabis Biden presidency, supported by a Democratic majority in both Houses.