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Santa Clara Extends Cannabis Ban Another Six Months

Yesterday the Santa Clara City Council voted unanimously to continue banning all types of cannabis businesses in the city for another six months after the existing ban expires at the end of this year until June 30, 2019. On November 6 voters in Santa Clara passed Measure M, which levies taxes on cannabis businesses, should any be licensed by the city, with an astounding 77 percent “yes” votes.

“We are asking that the ban be extending through June 30 of 2019 in order for us to have some time to bring a regulatory framework for the full council to consider,” said Assistant City Manager Ruth Shikada at the November 13 city council meeting.

Santa Clara’s city staff have long delayed taking action on permitting cannabis businesses, a position that frustrated some council members, especially Dominic Caserta who resigned in May after his history of sexual harassment of his own high school students was revealed to the public. Caserta and fellow city council member Patricia Mahan voted against the city’s existing cannabis ban one year ago.

Measure M, placed on the November ballot by the City Council on July 16, envisions seven different types of cannabis businesses and by default levies a tax of either 3 or 5 percent on their gross receipts.  However, the measure allows the City Council, once per year, to increase (or decrease) these tax rates up to a maximum of 10 percent on gross receipts and $25 per square foot area of cannabis cultivation.

The business types prescribed in Measure M include retail, manufacturing, cultivation, distribution, nurseries, testing, and transportation, although the City Council may decide next year to actually license only retail dispensaries or even no cannabis businesses at all. The city’s ballot statement claims that the measure will earn $2.2 million in revenue for the city, implying that two or three retail dispensaries are envisioned.