Will another SLO County city allow cannabis sales? Voters could help decide
Cannabis businesses can’t currently operate in the city of Arroyo Grande — but that could start to change in November, when voters will be asked to consider a ballot measure that would open the door for the capture of marijuana tax revenue.
According to a news release from the city, Arroyo Grande voters will see a proposal on the Nov. 3 ballot asking whether or not the city should tax cannabis businesses.
The measure is one potential solution to the city’s declining revenues compared to its costs — which has created an estimated $2.8 million deficit that will be covered by city reserves during the upcoming fiscal year, the release said.
“Without a new source of revenue, the city may need to evaluate service levels in future years, which could result in longer timelines for infrastructure maintenance, changes to emergency service capacity, and staffing adjustments,” the city wrote in the release.
As of now, Arroyo Grande does not allow any form of cannabis retail or delivery originating from within city limits. Customers interested in purchasing cannabis products either drive out of town, to Grover Beach, San Luis Obispo or another city that offers cannabis products, or they can order delivery from outside the city, generating tax revenue for those cities that do allow cannabis sales.
Arroyo Grande is one of two SLO County cities that does not allow commercial cannabis activity. Paso Robles is the other city, and was also in the process of exploring options to loosen its restrictions as of May.
If approved, the business tax measure would allow the city to tax cannabis businesses in the future, opening the door for the City Council to approve rule changes and invite in future marijuana sales.
“The council voted unanimously to give this choice to our voters,” Mayor Caren Ray Russom said in the release. “This tax would generate revenue that stays in our community, supporting public safety, road maintenance, parks, and other services that Arroyo Grande residents use.”
The release said the tax, if approved, would only be paid by customers and businesses in the cannabis industry. Those who do not buy or sell cannabis wouldn’t pay the tax.
The measure also doesn’t automatically authorize the opening of dispensaries or delivery businesses, the city said. That would require a future policy change approval from the City Council.
The release said the measure would generate an estimated $500,000 per year, which would go to fund road maintenance, public services and recreation, the release said.
“We are focused on maintaining and improving the services that our residents rely upon,” city manager Matthew Downing said in the release. “This measure gives voters the opportunity to vote on a new revenue source that could be invested directly back into maintaining Arroyo Grande’s infrastructure and services.”
The decision to place the measure on the Nov. 3 ballot was unanimously approved by the City Council on Tuesday June 9.
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