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November 8, 2016 — California General Election
Ballot and voting information for Alameda County.
This is an archive of a past election.

Sales Tax on CannabisOrdinance

Local
November 8, 2016California General Election

City of Hayward
Measure EE Ordinance - Majority Approval Required

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Election Results

Passed

26,729 votes yes (60.63%)

17,357 votes no (39.37%)

  • 100% of precincts reporting (115/115).

To assure local control and close on-going deficits, shall the City of Hayward be authorized to enact a general tax ordinance not exceeding 15% of gross sales for all products associated with medical or adult use of cannabis, from cultivation, distribution, manufacturing, and retailing of cannabis or products derived therefrom, if the City of Hayward permits cannabis business activities, such tax to be in addition to any other taxes imposed by the City of Hayward or the State of California?

Impartial analysis / Proposal

The Hayward City Council has placed a measure on the November 8, 2016 ballot, asking voters to authorize the enactment of a general tax on the adult use of recreational cannabis, i.e. marijuana, and medical cannabis.  If passed by a simple majority of the voters voting on the measure, the City would be authorized to enact an ordinance imposing a tax not exceeding fifteen percent (15%) of gross sales of adult use of recreational and medical cannabis. As stated in the ballot question, the tax, if enacted, would apply to the cultivation, distribution, manufacturing, business-to-business sales, as well as retail sales.

 

Generally, businesses engaged in supplying cannabis to other businesses or businesses engaged in the retail sale of adult use recreational or medical cannabis to customers would be required to collect the tax from other businesses or customers as part of their gross sales.  Gross sales and taxes would be reported to the California State Board of Equalization, which in turn would remit the cannabis tax revenue to the City of Hayward.

 

The cannabis tax, if enacted, is intended to aid in the alleviation of the City of Hayward's ongoing general fund operating deficit, as set forth in the resolution adopting the ballot question. The resolution further contains findings of a fiscal emergency, as required for a general tax to be submitted to the electorate at a special municipal election.  Revenue from the tax would be deposited in the City's general fund and could be used for any valid municipal purpose, including police and fire services, paramedic services, youth and anti - gang programs, disaster preparedness, economic development, street repairs and maintenance, graffiti removal, and code enforcement.

 

The Hayward tax ordinance could be enacted only if adult use of recreational cannabis is legalized in the State of California.  For example, Proposition 64 on the November 8, 2016 statewide general election ballot presents the question of whether adult use of recreational cannabis should be permitted in the State.  If Proposition 64 passes and if this Hayward City Council - sponsored measure also passes, the Hayward City Council would be authorized to enact a comprehensive ordinance that imposes the cannabis tax. This measure, if adopted, does not mean the City Council is required to enact such ordinance -- it simply means the City Council would retain local control in deciding whether to enact a tax ordinance after considering the positive and negative factors of allowing adult recreational cannabis businesses and medical cannabis vendors in the City of Hayward.

 

The fifteen percent (15%) tax is the maximum tax that could be imposed on cannabis businesses.  The City Council could impose a lower tax.  However, the cannabis tax would be in addition to any other sales or transactions tax imposed by the City of Hayward, the State of California or any other taxing agency.

 

A 'yes' vote on the measure means the voter is in favor of authorizing the City to enact a cannabis tax ordinance.  A 'no' vote means the voter is not in favor of authorizing the City to enact a cannabis tax ordinance.

 

s/MICHAEL S. LAWSON City Attorney, City of Hayward

The above statement is an impartial analysis of Measure EE. If you desire a copy of documents related to the measure, please contact the City Clerk’s Office at (510) 583 - 4400 and a copy will be mailed at no cost  to you .  You may also access more information about the measure on the City of Hayward website at the following address:  http://www.hayward - ca.gov/your - government/elect ions/ballot - measures    

— Hayward City Attorney

Arguments FOR

This Measure is intended to protect local control. Proposition 64, a state ballot initiative, seeks to legalize the adult use of marijuana and applies state taxes to the cultivation and retail sales of cannabis.  While Proposition 64 appears to allow for local municipal taxes on the adult use of marijuana, there is no clearly stated guarantee that cities like Hayward will be allowed to impose any tax once the measure is passed and becomes law.

Measure EE, a local Hayward measure, does not approve the cultivation, production, or retail sales of cannabis within the City of Hayward. It simply preserves the right of our community to apply a local tax to cover local costs should the Council of the City of Hayward ever approve the adult use of cannabis in the future within the city limits of Hayward. All revenue would remain local and could not be taken by the State.

Measure EE does not establish a specific tax rate on cannabis. It only establishes a maximum tax rate should our community approve cannabis cultivation, production or sales in the future. It preserves local control and local flexibility to assure that the City has the financial resources to manage cannabis -related issues when and if the community chooses to allow processing or sales of adult use cannabis.

If we do not pass this Measure, our community may lose our right to tax cannabis. It is essential that we be able to generate the necessary revenue to support effective control, education and enforcement policies and procedures to assure the safety of our community. Passing Measure EE preserves the critical ability of our  City to generate revenue that will stay local and assure community safety in the future. We urge you to vote Yes on Measure EE.

s/BARBARA HALLIDAY Mayor, City of Hayward

s/SARA LAMNIN Hayward Council Member

s/ELISA MÁRQUEZ Hayward Council Member

s/AL MENDALL Hayward Council Member

s/MARK SALINAS Hayward Council Member    

Arguments AGAINST

No opposition argument listed

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