SLO County is collecting cannabis tax, but there are no licensed businesses yet

Cannabis 101: Here’s what you need to know about recreational marijuana

Budtender Danny Cress gives a crash course in recreational marijuana, legal in California as of Jan. 1.
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Budtender Danny Cress gives a crash course in recreational marijuana, legal in California as of Jan. 1.

San Luis Obispo County started collecting taxes from cannabis businesses in unincorporated areas in late 2018 — bringing in about $40,000 so far.

That’s despite the fact that none of the businesses have received all of the permits and licenses needed to operate — a process that would-be business owners complained has been long and cumbersome, according to reports from the county Planning and Building Department.

The taxes collected, instead, came from eight cannabis cultivation businesses that are currently working through the permitting process, according to newly appointed county tax collector Jim Hamilton.

Those businesses are operating under a county resolution that allows a limited number of cannabis businesses to operate while their licenses are pending, county officials said.

In November, the county tax collector’s office sent letters to all the businesses informing them that revenue generated after July 1, 2018, was taxable.

Hamilton said that “right now, it’s really on their honor” if businesses pay their taxes.

Ultimately, “we do retain the right to go back and audit, which we will be doing,” Hamilton later added.

The eight businesses that participated paid taxes on gross receipts totally $1 million — as the county voter-approved cannabis tax that went into effect in July started at 4 percent.

Tax revenue from cannabis will likely lurch upwards in 2019, as dozens of businesses are expected to complete the permitting process and become licensed by the state Bureau of Cannabis Control.

So far, San Luis Obispo has received 89 applications for cannabis land use permits — 76 of which are for cultivation and 13 for other types of businesses such as dispensaries, according to the Planning and Building Department.

Only eight permits have been approved as of Dec. 20. Five of those were appealed and will face the county Board of Supervisors in 2019.

Cannabis businesses must also acquire a county business license, which involves a background check, and a license from the state Bureau of Cannabis Control.

Update: This story was updated Friday at 10:20 a.m. to add additional comments from Jim Hamilton.

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