SEC. 21.50. TAXATION OF MEDICAL MARIJUANA COLLECTIVES.

(Added by Ord. No. 181,638, Eff. 4/18/11.)

(a) No registration certificate or permit issued under the provisions of Article 1 or Article 1.5 of Chapter 2 of this Code, or the payment of any tax required under the provisions of Article 1 or Article 1.5 of Chapter 2 of this Code shall be construed as authorizing the conduct or continuance of any illegal business or of a legal business in an illegal manner. Nothing in this section implies or authorizes that any activity connected with the distribution or possession of cannabis is legal unless otherwise authorized and allowed by California and federal law. Nothing in this Section shall be applied or construed as authorizing the sale of marijuana.

(b) Every person engaged in operating or otherwise conducting a medical marijuana collective that attests under penalty of law to compliance with Proposition D and not otherwise specifically taxed by other business tax provisions of this Chapter, shall pay a business tax of $60.00 for each $1,000.00 of gross receipts or fractional part thereof. No new business tax registration certificates shall be issued for any medical marijuana collective business activity. Any medical marijuana collective that does not attest to compliance with Proposition D shall not be taxed under any Section of this Article for any medical marijuana collective business activity for tax year 2016 and forward. It shall be the burden of the medical marijuana collective to determine and accurately represent to the Office of Finance whether it complies with Proposition D. (Amended by Ord. No. 184,135, Eff. 1/22/16.)

(c) For purposes of this section, a “medical marijuana collective” means any activity regulated or permitted by Article 5.1 of this Code or Health and Safety Code sections 11362.5 et seq., that involves planting, cultivating, harvesting, transporting, dispensing, delivering, providing, manufacturing, compounding, converting, processing, preparing, storing, packaging, or testing any part of the marijuana plant for medical purposes.

(d) For purposes of this section, “gross receipts” includes all amounts that would be considered gross receipts under section 21.00, including without limitation:

(i) Membership dues;

(ii) The value of in-kind contributions;

(iii) Reimbursements provided by members, regardless of form; and

(iv) Anything else of value obtained by a medical marijuana collective.

(e) All taxpayers subject to this section must pay the full tax imposed by this section regardless of any rebate, exemption, incentive, or other reduction set forth elsewhere in the Municipal Code, except as required by California or Federal Law. No provision in the Municipal Code can lower the tax rate set forth in this section or otherwise reduce the amount of taxes paid hereunder unless the provision specifically states that the reduction applies.

full tax imposed by this section regardless of any rebate, exemption, incentive, or other reduction set forth elsewhere in the Municipal Code, except as required by California or Federal Law. No provision in the Municipal Code can lower the tax rate set forth in this section or otherwise reduce the amount of taxes paid hereunder unless the provision specifically states that the reduction applies.

(f) The City Council may impose the tax authorized by this section at a lower rate and may establish exemptions, incentives, or other reductions as otherwise allowed by the Charter and California law. No action by the Council under this paragraph shall prevent it from later increasing the tax or removing any exemption, incentive, or reduction and restoring the maximum tax specified in this section.

(g) Every medical marijuana collective taxed by this section shall remit with its annual renewal of business taxes an affidavit in a form approved by the Director of Finance attesting to its compliance with Proposition D and such affidavit shall be subject to public disclosure. Any person who makes a false statement or representation in the affidavit is guilty of a misdemeanor. An updated business tax registration certificate in a form approved by the Director of Finance, further clarifying that such certificate is not a permit to operate a business, shall be issued to all medical marijuana collectives subject to tax as set forth in Section 21.50 (b). All medical marijuana collective business tax registration certificates in their current form shall be invalid effective March 31, 2016. A medical marijuana collective that remitted its annual payment of business taxes in 2016, before the effective date of this ordinance shall, before March 31, 2016, complete the affidavit attesting to its compliance with Proposition D. (Added by Ord. No. 184,135, Eff. 1/22/16.)

(h) It shall be a misdemeanor for any person operating a medical marijuana collective as defined by Section 21.50(c) to maintain or display a business tax registration certificate for any classification other than that set forth in Section 21.50(b) for medical marijuana collective business activity or to maintain or display an expired, suspended or otherwise invalid business tax registration certificate. (Added by Ord. No. 184,135, Eff. 1/22/16.)