San Francisco Cannabis Tax Measure Passes Easily

Proposition D passed with over 66 percent of the vote

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.

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