taxing

A nonprofit advocacy group, Social Equity LA, organized with local cannabis business owners to oppose the measure in letters to Mayor Karen Bass.

Luis Rivera, executive director of the nonprofit, said Measure CB risks legitimizing the illegal cannabis industry while linking city finances to the tax revenue the businesses would generate. The measure also would undermine Proposition 64, the state law that requires cannabis businesses to be licensed, he said. And amid the city’s struggles to track and close illegal cannabis businesses, Rivera said it will be difficult to force them to pay up.

“There’s no guarantee or mechanism to assure that illegal operators will pay the taxes or fulfill their obligations,” Rivera said.

Even if they pay taxes, illegal operators could undercut legal businesses by selling unregulated products and avoiding requirements, such as code inspections and safety tests for merchandise, that legal businesses must fulfill to keep their licenses, he said. For an already struggling industry, the answer isn’t taxing more businesses, he said — it’s lowering taxes.