Commercial Cannabis

On June 29, 2022, the Council adopted Resolution No. 22-097 C.S. placing a ballot measure on the November 8, 2022 ballot. The ballot measure will ask the voters: Cannabis Business License Tax. Shall the measure to impose an annual cannabis (marijuana) business license tax of up to 8% of gross receipts from retail businesses, 2% of gross receipts from testing laboratories, and 6% of gross receipts from other cannabis businesses, with an additional tax on highly potent products, generating about $604,000 to $1.3 million a year, with all funds staying local and subject to audit, and effective until repealed by voters, be adopted?

Full Text of the Proposed Ordinance
City Attorney's Impartial Analysis
No primary arguments for or against the measure were received.

Visit monterey.org/cityclerk for more information.

Update on July 25, 2022: Resolution 22-097 at the July 19, 2022 City Council Meeting. This Resolution amended and reinstated Resolution 22-087 to revise the ballot measure questions to reflect the maximum tax rates the City can impose on commercial cannabis activity. READ THE FULL RESOLUTION

Ballot Measure Language: Cannabis Business License Tax. Shall the measure to impose an annual cannabis (marijuana) business license tax of up to 8% of gross receipts from retail businesses, 2% of gross receipts from testing laboratories, and 6% of gross receipts from other cannabis businesses, with an additional tax on highly potent products, generating about $604,000 to $1.3 million a year, with all funds staying local and subject to audit, and effective until repealed by voters, be adopted?

Staff is now working on a regulation ordinance that will be up for review next.

Resolution 22-087 was passed by the City Council at the June 29, 2022 City Council Meeting. The July 19, 2022 City Council will also have a Cannabis item on the agenda to finalize the wording for the ballot measure. The Agenda Report for the July 19 Council Meeting will be posted at least 24 hours prior to the meeting.

At its meeting on June 29, 2022 at 7 p.m., the Monterey City Council will consider a Cannabis Tax Measure for the November 2022 General Election for Monterey citizens to consider.

If voters approve the proposed measure, cannabis retail businesses would pay an initial tax of 4%, cannabis testing lab businesses would pay 1%, and all other cannabis businesses would pay 6%. The measure would allow the City Council to increase the tax to up to 8% for cannabis retail businesses, 2% for testing laboratories, and 8% for all other businesses. In addition to these tax rates, the measure also allows higher taxes on cannabis-infused beverages containing natural or artificial sweeteners and on high potency products (those with more than 17% THC) to discourage products with public health risks.

The proposed rates are mostly aligned with other cannabis retail tax rates in the region which range from 4.5% in unincorporated Monterey County to 6% in Santa Cruz County. Some cities, such as Seaside, have voter-approved ordinances authorizing a cannabis retail tax of up to 10%, with a lower rate adopted by City ordinance.

For a copy of the agenda report and recommendation, please visit: https://isearchmonterey.org/OnBaseAgendaOnline/Meetings/ViewMeeting?id=5142&doctype=1

The Monterey City Council received a commercial cannabis update at the Dec. 21 Council Meeting, and voted to approve staff recommendation to:

• Direct staff to develop regulations allowing no more than three (3) retail permits (one each in Downtown, Lighthouse, Cannery Row)
• Direct staff to prepare documents and efforts to regulate up to three cannabis retail businesses (Operating or Development Agreement)
• Direct staff to research and come back to Council to consider a potential cannabis retail tax for the November 2022 election

You can watch the meeting playback on YouTube at https://youtu.be/gjVffQTklQM?t=3119 and view the presentation in PDF.

Thank you for your interest and participation.

Item 10. Direction to Staff to Develop a Regulatory Ordinance that Allows Three Retail Cannabis Permits in the City and Receive an Update on Step 3 Elements of the Commercial Cannabis Roadmap, is on the Tuesday, December 21, 4:00 p.m. City Council Agenda. Meeting Agenda | Full Agenda Report

The meeting agenda also provides details on how to participate in the meeting. This meeting is hybrid, so participation can be in-person or online.

Here's the updated timeline.

At its meeting on August 17, 2021, the Monterey City Council has expressed their initial support for commercial cannabis.

Staff has been directed to move forward with the Cannabis Roadmap, which includes consideration of as few as one and as many as three cannabis retailers total in the City of Monterey, located in the downtown (except Alvarado Street), Lighthouse District, and Cannery Row Business District (except Cannery Row itself). Council also stated that it would consider cannabis retail operations on Cannery Row and at the Monterey County Fairgrounds at some point in the future. The Council expressed an interest in maintaining a State standard of 600 feet buffer zones around schools, day care centers, and youth centers.

Staff is now working on environmental review and conducting additional research on cannabis retail selection processes. This is an in-depth process that will require significant staff time, among other City Council priorities that affect the Community Development Department, which includes affordable housing, sea level rise adaptation, and more.

To watch the latest City Council Meeting on the topic, please view the video below.

The Monterey City Council will continue its review and provide guidance on step 2 of the Commercial Cannabis Roadmap. Join us in the evening session at 7 pm. and find the agenda report and meeting viewing/participation instructions at https://isearchmonterey.org/OnBaseAgendaOnline/Meetings/ViewMeeting?id=4799&doctype=1

The next step in the Commercial Cannabis Roadmap for the City of Monterey is on the May 4, 2021 Monterey City Council Regular Meeting. Details are available at http://isearchmonterey.org/OnBaseAgendaOnline/Meetings/ViewMeeting?id=4792&doctype=1 and the video on-demand is available at youtube.com/cityofmonterey.

The video recording and supporting documents have been added from the City of Monterey's Cannabis Retail Zones meeting on Tuesday, April 13, 2021. Find these materials in the Documents and Video tabs on the right column, or in the links below:

Powerpoint Presentation: Potential Retail Zone Locations

Zoning Map: Suggested Commercial Retail Cannabis Zones

Zoning Map: 600-Ft Buffers to Schools, Daycares, and Youth Center Parcels

The City of Monterey received an additional batch of approximately 500 postcard survey responses in the mail last week. The data has been entered and has been updated on this Survey Summary Report which compares postcard survey data with the online survey data.

View the latest report here.