STOCKTON — Voters who reside in Lodi city limits may have seen just one local measure included in their ballots this week, aimed at taxing cannabis businesses.
Measure X is San Joaquin County’s second attempt to create an ordinance that would place a tax on commercial cannabis businesses in unincorporated areas, and proponents say if approved, it could generate an estimated $250,000 in revenue.
The measure requires two-thirds of the county’s voters to pass, and 50% of the revenue generated will be placed in the Children’s Trust Fund, to be used only for early childhood education and other programs that benefit youths, according to the San Joaquin County Registrar of Voters analysis.
The other 50% will be used for programs and services that promote public health, homeless mitigation, and enforcement of cannabis codes and statutes.
An argument in favor of the measure was prepared by San Joaquin County Supervisors Kathy Miller and Tom Patti, along with El Concilio president Jose Rodriguez, Child Abuse Prevention Council executive director Lindsey Turner-Hardin, and San Joaquin Children’s Alliance director Christina Gilbert.
“Investing in our children is the best way to fight crime, reduce gang violence, develop a strong workforce to attract living-wage jobs, and grow our local economy,” the argument states. “Proven programs that strengthen families, increase educational opportunities, provide young people with mentorship and job training have seen deep cuts. During these unprecedented times, it is more important than ever to invest in our children and community so every one benefits.”
Under the new ordinance, every person who cultivates commercial cannabis in the unincorporated parts of the county will pay a cultivation tax between 3.5% and 8% of gross receipts each year, as well as an annual $2 cultivation square footage payment.
In addition, every person who engages in non-cultivation commercial cannabis business in unincorporated areas shall pay an annual tax of between 3.5% and 8% of gross receipts.
Zach Drivon, a Stockton attorney whose firm Drivon Consulting focuses on cannabis issues, said the measure provides an opportunity for businesses in the industry to be approved by county leaders in a streamlined fashion.
“In some regard, it will allow the county to apprise itself of taxes, and allow the county to capture revenue through the permission of the voters,” he said. “And its benefits go directly to the community, specifically for programs it provides for youth.”
Cannabis has been legal in the state, as well as the county, since the passage of Measure P in 2016. While three dispensaries in Stockton have generated revenue for that city in the last few years, Drivon said they were not bringing any benefit to the county as a whole.
“We’ve been dealing with the impacts of cannabis since it became legal, but we haven’t been conceptualizing the benefits of it,” he said. “This allows the county to participate in the industry, which generates millions in revenue for other jurisdictions, and it allows for the elimination of black market operations.”
There are currently no cannabis businesses operating in unincorporated areas of the county, but some have applications under review by the county’s planning commission.
One of those businesses is located just outside of Lodi along Highway 12 near Tretheway Road.
A company calling itself Top Shelf Urban Farms, Inc. has plans to convert a property at 10400 East Highway 12 into a cannabis cultivation and distribution facility.
The project includes converting two buildings totaling 51,720 square feet into cultivation centers, while another 4,921-square-foot building will be used for distribution.
A new building totaling 25,000 square feet is planned for additional cultivation operations.
The project was to be presented to the county planning commission on June 4, but the meeting was canceled and review of the proposal has yet to be placed on a future agenda.
No arguments opposing the measure have been turned in to the county registrar of voters.
The county placed a similar measure on the ballot in 2018 aimed at generating revenue for children’s programs and education.
Measure B would have created an ordinance in the county’s code placing an annual tax between 3.5% and 8% of gross receipts each year on all cannabis businesses, as well as the $2 cultivation square footage payment each year.
While 63.54% of residents voted in favor of the measure, it failed to garner two-thirds of the vote, or 66.7%.