City of Long Beach Launches Pilot Tax Credit Program to Support Local Cannabis Businesses
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Long Beach, CA ~ Long Beach City Council Approves Cannabis Tax Relief Plan to Support Local Industry and Community Benefits

During its meeting on April 9, 2024, the Long Beach City Council unanimously approved a Cannabis Tax Relief Plan and ordinance amendment in an effort to boost growth in the local cannabis industry and promote community benefits. The plan includes a 1% tax reduction for cultivation and adult-use retail businesses, as well as a Pilot Tax Credit Program that could potentially provide a combined 4% tax relief for qualifying businesses.

Mayor Rex Richardson expressed his support for the plan, stating that finding new ways to support local businesses and stimulate the economy is a key part of the city's economic development strategy. He believes that the Pilot Tax Credit Program will not only uplift the cannabis industry but also encourage responsible business practices that prioritize frontline employees.

The amended ordinance and 1% tax reduction for all cannabis businesses went into effect on May 24, 2024. The city is now accepting applications for the Pilot Tax Credit Program.

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To be eligible for the program and receive a tax credit of 3%, cannabis cultivation or adult-use retail businesses must be in "good standing" and meet certain criteria. These criteria include local hiring, workforce quality of life, training, and equity business support, with the goal of promoting meaningful employment opportunities through a workforce and equity lens.

Businesses enrolled in a Special Circumstances Payment Plan may also be eligible for the program after six months of proven payments. The tax credits will be applied upon remittance of quarterly or annual taxes and gross receipts reports, along with any other required documentation.

More information about the program can be found on the city's Cannabis Business License and Fees webpage, including application requirements and a link to apply.

Ninth District Councilmember Dr. Joni Ricks-Oddie believes that this is another step forward in supporting the local cannabis industry and ensuring its long-term success. By offering incentives to businesses that prioritize community benefits, such as local hiring, the city is creating an economic environment that positively impacts the workforce.

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The decision to develop a Cannabis Tax Relief Plan was made by the City Council in April 2023, following research on best practices from other jurisdictions that license cannabis businesses. The recommendation was brought forward by Ninth District Councilmember Dr. Joni Ricks-Oddie and co-sponsored by Vice Mayor and Second District Councilwoman Cindy Allen and Sixth District Councilwoman Dr. Suely Saro.

Previous tax relief efforts for the cannabis industry in Long Beach include a reduction of cultivation and retail taxes for equity businesses by half the rate of non-equity businesses in August 2023, and a reduction of manufacturing, distribution, and lab testing taxes from 6% to 1% of gross receipts in December 2019.

Businesses that meet the eligibility criteria can contact the Department of Financial Management, Business Services Bureau via email at cannabislicense@longbeach.gov or by phone at 562.570.2662 with any questions about the program. The city remains committed to supporting its local cannabis industry and promoting community benefits through these tax relief efforts.

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