Measure T states that a maximum 10 percent tax will be applied to cannabis businesses allowed to operate in Modesto. Sounds OK, but the issue is that this is a tax on gross receipts. That means these businesses aren’t allowed to deduct labor, product cost, supplies, transportation, rent, etc. before this 10 percent tax takes effect.
Any business involved in cultivation, planting, harvesting, transporting, manufacturing, compounding, converting, processing, preparing, labeling, storing, packaging, testing, and/or retail sales can be taxed at 10 percent and the cost will be multiplied by 10 percent at each step. A legal dispensary (even for medical marijuana) will have to pay multiple times the cost of the illegal market to provide the same product.
If this was a regular business tax, it would only be on profits after expenses – not the total gross proceeds and would be fair. As written, no legal dispensary could compete with the illegal market. Please check your voter guide to verify.
Bob Meyer, Modesto