With California’s legal cannabis industry on the verge of going up in smoke, the Williams City Council may take another look at changing fees the city planned to charge pot growers.
The city slashed cannabis fees 50 percent for the first project that is set to go north of the sewer ponds, after developer Marco Guizar asked for the reprieve in May, due to poor market conditions for marijuana.
Guizar’s outdoor growing operation has been in the works for several years, despite a floundering cannabis industry burdened by hefty taxes, costly regulations, and competition from corporate farms and the flourishing illegal weed trade.
City Administrator Frank Kennedy said the Williams Finance Committee took a hard look at the fees and agreed an initial reduction was appropriate.
Kennedy said the reduction will take Guizar’s fees from about $178,000 to $89,000.
“We do have the ability to do that,” Kennedy said.
Kennedy, however, advised the City Council to review fees annually to take into consideration the changing market conditions of the cannabis industry.
With the pot market on the verge of collapse, the California legislature is pouring millions of dollars into the industry.
Gov. Gavin Newsom’s 2022-20223 budget removes what he said are unnecessary administration and costs, and invests millions of dollars to stabilize the market by driving consumers to the legal cannabis trade.
If approved, the cultivation tax rate as of July 1 will be set at zero, and the point of collection and remittance for sales taxes will be shifted from distribution to retail on Jan. 1, 2023. Additionally, millions of dollars in grants will be allocated to help cities and counties develop and implement local retail licensing programs.
To compete with the illegal cannabis market, boost local revenues, and attract tourists, the race is now on in many jurisdictions to place cannabis lounges and cafes in cities and counties, where customers can consume cannabis on-site, whether by smoking, vaping, or eating edibles.
Currently, the City of Williams does not receive any Cannabis related income, Kennedy said.
City Council members said they have mixed feelings about cannabis in Williams, but agreed that changes to fees may help the businesses that are approved not only survive but create revenue growth opportunities in the future. ■