Los Angeles County’s Board of Supervisors approved a ballot measure last Tuesday that would levy a 10 percent tax on the county’s cannabis industry in an effort to raise additional funds for homeless housing and health services, the Los Angeles Times reports.
Businesses that produce and distribute marijuana, and “related products,” would be subject to the tax on their gross receipts. The tax would apply to both medical and recreational cannabis operations, if the latter is legalized by California voters in November.
If approved by a two-thirds majority of voters, the plan could raise up to $130 million a year, according to county analysts. The money would be used to fund mental health and substance abuse treatment, emergency housing, rental subsidies and other services to reduce the county’s homeless — of which the Housing Services Authority estimates there are about 47,000 in L.A. County.
The board initially proposed a “millionaire’s tax,” property tax, and quarter-cent sales tax to raise the funds, but they ultimately agreed on the marijuana tax. Some officials are concerned that too many taxes on the legal cannabis market will push people into the informal market.
Supervisor Don Knabe, who opposes legalization, voted for the tax because if the voters approve the legalization proposition, “we ought to get a piece of the action, because it will help those that we need to help.”
L.A. County officials have already budgeted $100 million this year for homeless housing and services.
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