Unsanctioned Weed Sales Have San Francisco Pondering a Pause on Its Cannabis Tax

The next step is the mayor's signature

San Francisco is getting an interesting economic lesson right now.
Esteban Lopez/Unsplash

As legalizing recreational marijuana has gained more steam across the nation, a number of reasons why it makes sense to do so have been cited by proponents of the measures. Among them are the idea that legal weed can be taxed and used to fund various government projects, and the notion that regulating recreational marijuana can be a boost for local businesses.

But there’s a complicating factor here — namely, just because weed is legal in a city or state now doesn’t mean there wasn’t a market for it before. Or, for that matter, plenty of sellers willing to risk the wrath of law enforcement. And just because weed is legal somewhere doesn’t mean that they’re going to go away.

Which brings us to the situation currently in play in San Francisco. NPR reports that the San Francisco Board of Supervisors recently voted to suspend a tax levied on cannabis businesses for 2021 and 2022. District 8 Supervisor Rafael Mandelman took to Twitter to explain the policy.

“Cannabis businesses create good jobs for San Franciscans and provide safe, regulated products to their customers,” Mandelman wrote. “Now is not the time to impose a new tax on small businesses that are just getting established and trying to compete with illicit operators.”

The measure is now awaiting a signature from the city’s mayor, London Breed. It’s a complex blend of legal wrangling and economic policy — and it’s one that could have interesting implications for legal cannabis businesses across the nation.


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