Marijuana industry could bring significant tax revenue to San Jacinto’s coffers

Marijuana-related businesses are already clamoring for their green spot in the valley

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San Jacinto has passed ordinances to allow marijuana cultivation, manufacturing, taxation and distribution.

■ Matt McPherson / Contributed

In November, San Jacinto voters approved Measure AA, which allows for taxation on the cultivation, manufacturing, distribution, and retail sales of marijuana. In contrast, other cities that did not pursue the taxation of marijuana will now have to wait until 2018 to pass a tax measure. So far the city has approved an ordinance which allows manufacturing, cultivation, and distribution, although the land use for cultivating, distribution, and manufacturing has not yet been approved.
The rezoning issues that would allow these now legal factors would have to go to planning for approval, then back to the city council for a vote. One huge proactive step toward the legalization of marijuana in the city is the passing of an urgency ordinance by the council, which will allow outdoor cultivation in the agricultural zoned area north of Cottonwood Avenue and west of Sanderson Street.
According to the State of California, Ordinance No 16-16, County of Riverside, as City of San Jacinto, the voters approved the adoption of Ordinance 2016-08, which added Chapter 3.32 to the San Jacinto Municipal Code. This move was to secure a general tax on marijuana enterprises practicing within the City of San Jacinto, once said enterprises are authorized in the city.
The ordinance of Section 3.32.010 of the San Jacinto Municipal Code permits a general tax on marijuana of 15 cents per dollar of gross receipts. Also the section permits $50 tax per square foot of space used in association with the cultivation and/or manufacturing of cannabis or cannabis-infused products.
San Jacinto has opted to collect 15 cents per dollar of gross receipts generated, but according to Section 1, decided to tax only $10 per square foot under Division 10 of the Business and Professions Code, in relation to distribution, transport, and any other commercial activity (as defined in Section 3.32.030(E)). The $10 tax per foot will exclude retail sales.
Section 2 will permit the collection of $15 per square foot of space utilized in association with outdoor cultivation and testing of cannabis within the jurisdiction. Finally, $25 per square foot will be collected in association with indoor cultivation and manufacturing of marijuana within the jurisdiction.

Photo by Matt McPherson/The Valley Chronicle
Looking northwest from the intersection of Cottonwood Avenue and Sanderson Street. Vast expanses of land are poised to accommodate the rapidly growing cannabis industry after the approval by the City of San Jacinto.

These legal steps pave the way for an endless revenue stream that will potentially fill the coffers within the city and allow funding for future projects and development within the community. All these voter-approved implementations have been fully supported and also recommended by the San Jacinto City Attorney Mike Maurer.
Mauer’s recommendation says; “Staff recommends that the City Council hold a second reading and approve Ordinance No 16-16 establishing a tax rate for commercial marijuana cultivation activities.” Maurer further explained: “The fiscal impact depends on the type and extent of marijuana uses allowed in the city. For example, an outdoor cultivation site with the minimum 10,001 square feet would pay $150,015 in annual tax. A one-acre site would pay $653,400.”
“San Jacinto voters overwhelmingly approved Measure AA, taxing the legalization of cannabis,” explained San Jacinto council member Andrew Kotyuk. “Stringent approval and monitoring practices have been adopted in the city that parallel California regulations under AB266, AB243, and SB643.” This includes controls of personnel, accounting, and seed to sale.
“This industry hires local with salaries ranging from $40,000-$100,000,” said Kotyuk. ”Large medical conglomerates are hawkish on this industry and interested in companies that are established under FDA guidelines.”
Anthony Wagner, planning commissioner of San Diego and a quasi-regulator of medical marijuana activities in that area and principal of Wagner & Associates, addressed the San Jacinto City Council at the Jan. 3 meeting. He praised the city’s stance on marijuana and said that his clients, medical cannabis manufacturers and extraction companies, are interested in pursuing a path forward to manufacture medical cannabis oil in San Jacinto‘s industrial zone.
These types of jobs, said Wagner, can earn valley residents high wages.“We are considered prime industrial, bringing wages of $65,000 to $100,000,“ said Wagner. “Our business would bring in no less than $250,000 in taxation per year, every year we are in operation. From flower to market, skilled high wage jobs, we look forward to working with you and your staff members.“

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