HomeMy WebLinkAboutAgenda Report - September 28, 2021 B-01 SMCaQGEMEDA ITEM
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AGENDA TITLE: Presentation on Cannabis Regulation and Taxation Potential
MEETING DATE: September 21, 2021
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Presentation on Cannabis Regulation and Taxation Potential
BACKGROUND INFORMATION: The City of Lodi currently prohibits cannabis business operations
within City limits to the maximum extent permitted under state law.
Staff consistently reviews potential revenue opportunities for the
City to provide the Council with the best available information and
best position the City to take advantage of available opportunities the Council would like to explore
further. New revenue from cannabis would provide the City with flexibility to maintain and enhance
services in the future. In addition, the City has recently seen an uptick in interest from cannabis
businesses looking to expand. Some businesses make claims of significant revenue benefit to the City,
provided proof of taxes paid to other communities and have records of success in those communities.
Staff sought independent analysis of the claims these businesses have made_ The City's revenue
consultant, HdL Companies, provides staff with expert advice on revenue trends, economic activity,
potential revenue opportunities, in addition to their contracted services of sales, use and transaction tax
administration and auditing, business license tax administration and auditing and transient occupancy tax
administration and auditing- HdL is also a leader in cannabis tax regulation and administration
throughout the state, having drafted a large majority of the focal ordinances regulating and taxing
cannabis in the state. HdL's analysis confirmed there is significant revenue opportunities within the
cannabis industry in Lodi.
Dave McPherson from HdL has a background in both law enforcement and municipal finance, in addition
to his recent experience in municipal cannabis administration in Colorado and California. Dave will
provide a presentation on the opportunities in Lodi for cannabis regulation and taxation and address
initial concerns regarding legal cannabis and its potential impacts on the community. Staff has also
conducted preliminary research, including legal, public safety and finance and are available for specific
questions or to confirm HdL's findings_
FISCAL IMPACT_ There is no fiscal impact from this presentation. Legal cannabis
operations in the City have the ability to provide a new revenue
stream to the City's general fund.
Andrew Keys, Deputy City Manager
APPROVED: h -,Ve„F 707117 24
Stephen Schwabauer, City Manager