Cannabis Business Tax Heads to LA County Voters

The Los Angeles County Board of Supervisors voted Aug. 9 to send a ballot measure to voters that would impose taxes on cannabis operations in unincorporated areas.

Cannabis businesses aren’t currently permitted in unincorporated LA County, but that’s about to change. The Board voted in February to direct the Department of Consumer Affairs’ Office of Cannabis Management to implement a licensing program for unincorporated LA. Although plans are still being developed, LA can expect a total of up to 25 storefront retail businesses, 25 delivery businesses, 10 indoor/mixed light cultivation establishments, 10 manufacturing businesses, 10 distribution facilities and 10 testing laboratories. They would be spread out equally in each of the county’s five districts.

The ballot measure will ask voters to approve a 4% tax per square foot for mixed light cultivation and a $7 tax per square foot for indoor cultivation; a 4% tax on gross receipts for retail; and a 3% tax for manufacturing and distribution businesses. Those taxes would generate an estimated $10.36 million per year in revenue. After July 1, 2026, they would increase.

The measure needs a simple majority to pass.