A Glimpse of the Future

[dropcap class=”kp-dropcap”]L[/dropcap]ast month, Vista residents voted on several cannabis ballot initiatives. Until recently, cannabis businesses were prohibited from operating in the city of Vista.

Measure AA, which passed by 52.52 percent, will allow the city of Vista to set up a tax structure for cannabis businesses. The proposed taxes are six percent on adult-use retail and five percent on medical retail with the ability to increase the tax rate up to a range of 12 percent. Additional taxes include an initial four percent on manufacturing, two percent on distribution, one percent on testing and a $14 per square foot of canopy for cultivation. Although these tax rates may seem high, they are either lower or are in sync with what other cities have enacted. The taxes are expected to generate $1.5 to $2 million in tax revenue for the city’s general fund and will be earmarked for the police department, fire protection, road repair, neighborhood parks and to aid in the enforcement to shut down illegal cannabis businesses. The measure will also grant the city the ability to administer and draft future cannabis ordinances. It is unclear as to when or if Vista will draft a cannabis ordinance and what would be included in such an ordinance.

Also on the ballot was Measure Z, an initiative that will allow for 11 medical retail licenses to be awarded to cannabis businesses in commercial industrial, business parks and mixed use zones. Measure Z will also allow for the city to impose a seven percent special use tax on cannabis businesses’ gross receipts. The measure includes special use restrictions from other dispensaries and schools and requires security guards at all times during business hours. Measure Z was largely supported by the cannabis industry because it allowed for the most access for applicants to receive a license. It passed with 53.14 percent.

Measure BB, another ballot initiative that was a competitor to Measure Z, did not pass, with 54.06 percent of residents voting against it. This measure would have allowed for up to three delivery retail licenses and two testing laboratories.

“Likewise if another Vista cannabis ordinance were to be passed by the city, it will certainly be interesting to find out what the ordinance will look like and what to expect for application requirements.”

When two ballot initiatives are competing, the city of Vista only allows for the top vote-receiving initiative to pass. However, because Measure Z relates to licenses and Measure AA is limited to taxes, both initiatives are able to go into effect. Despite the passage of the tax ballot initiatives, it remains to be seen what hurdles retail applicants would need to overcome under Measure Z. Likewise, if another Vista cannabis ordinance were to be passed by the city, it will certainly be interesting to find out what the ordinance will look like and what to expect in terms of  application requirements. Considering that the rest of North County, outside of Oceanside, continues to prohibit all commercial activity, it is likely that the city of Vista will soon see an influx in investment and hopeful cannabis business operators.