A San Francisco measure to impose new taxes on recreational cannabis businesses sailed to a clear victory Tuesday, garnering over 66 percent of the vote with almost all precincts reporting.
Proposition D will levy a gross receipts tax on pot shops of 1 percent to 5 percent, depending on whether the business is a retail operator and how much gross revenue it takes in.
The first $500,000 of gross receipts from sales of recreational cannabis will be exempt from the tax, as will retail sales of medical cannabis. The tax will generate $5 million to $12 million beginning in 2021, when the measure kicks in. The money generated from the tax will go into the city’s general fund.
The measure also includes a provision allowing the city to tax out-of-town companies with online transactions in San Francisco that exceed $500,000 starting Jan. 1. The tax on online sales is not limited to cannabis businesses.
The Board of Supervisors will have the power to increase or decrease the cannabis tax after it goes into effect. The board voted 8-3 to put Prop. D on the ballot, with Supervisors Jane Kim, Rafael Mandelman and Hillary Ronen opposing the measure. Because it will send the new tax revenue to the general fund, it required a simple majority vote to pass.