uncertain and the supply chain is shaking itself out and it will take years for the retail to get built where our products will land, but in the meantime we need to survive and then there is downward pressure on prices. i have lived here all that time and my daughter is going to san francisco state and we have lived a comfortable life, but we and my partner have not gotten rich here and we don't own a home. we are example of typical business. >> typical cannabis business. >> i would say a typical business. if you help us get on our feet we can build industry here

together that will prosite employment opportunities and please nurture us while we are getting going. >> supervisor fewer: thank you. >> i am a policy group student at berkeley, and also have been interested in working with a number of cannabis startupst. i just wanted to first of all taking the due diligence to reach out to the community and get their feedback before proposing those amendments, that has been really helpful, but i want to make a specific concern regarding one of the propositions within the new law, and that is the fact that the proceeds of the cannabis business tax would be deposited in the general fund and could be used for any purpose in the city. i feel this proposition would better be useful for bringing

the black market into compliance. because we are putting a lower cannabis tax rate, i feel that the shorter amount of money that we would get would be better used for a more specific case and best catered towards bringing the black market towards compliance. thank you for your time. >> thank you. >> my name is rob king and i would like to add my voice today as a local grower with sense. we are trying to set an example for creating batches of small -- cannabis. we run our facility on renewable

energy via the city's clean power program and proud to align with the city's climate change goals. we had the sfpd over the other day and we invite you to join and check out our facility. we don't do these things because we have to, but we are trying to set a positive street for the city to have san francisco. we are good neighbors and i think we are the kind of neighbors that the city of san francisco wants. it is a huge risk to move our business here we are not a tech industry. . we are dealing with incredibly high rent and limited space. when it comes to taxation, we just want to be taxed like any similar small business brave enough to give it a go here in

san francisco. to propose a tax rate many times the rate of noncannabis-based businesses wil. we want to be taxed in line with any other business. >> i'm here today to advocate for a tax policy group that's fair for the industry. i degree notes are goini agree that it is going in the right direction. the industry is very hard to enter. anytime you have industry that

require as huge amount of overhead and then you add taxation on that, they are not even getting any sort of relief at the federal level also, it can be very high and san francisco has equity program and this equity program is very well intentioned by taxing at this high rate is i guess unintended consequence that will kill the equity program because these applicants already have a hard time getting capital and on top of that a very high tax burden, it will probably force some of them into the black market or have the black market continue. the goal of the city should be to get the black market licensed and permitted so that way the industry can grow rather than to force businesses back into the

black market. i would like the city to propose a zero or one percent tax overall. >> thank you for your engagement on this issue and for your brilliant and energetic staff we appreciate your engagement in past week and beyond, and i also thank you for the amendments today. it is headed in the right direction, so i just want to advocate for an amendment that we have proposed which would rather than impose a tax as a percentage in article 30 that you have proposed, it would define the tax as relating back

to the gross receipts tax that already exists in san francisco and adding a multiplier for cannabis. i think this accomplishes three of the immediate goals right now. one is normalizing the cannabis industry. treating cannabis is different just because is part of the policy group problem of sales regulation right now. it would address that and address the need of a higher tax right now, but it also allows the city to tier it to the gross receipts tax going forward in 2020 when that is readdressed, it's possible that the multiplier could be reduced or eliminated all together because it might not be necessary in 2020. if we continue to create cannabis as a separate tax, that

gets baked in for longer and less ability to be nimble in the structure for cannabis going forward. i hope we can only to engage on this over the next week. thank you very much for the engagement on this issue. >> bridget may. i run a small manufacturing company in san francisco. i am still waiting to get licensure, and like many other small manufactures that's been a hurdle to even get back into business. i live here and i have called this great city my home since 1989, and i would absolutely prefer to have my business stay here, however, i have to admit that the other cities and jurisdictions are looking for attractive. i support normalizing cannabis taxes to bring them on par with

other businesses and make san francisco for attractive to other businesses like myself. >> thank you for the amendments. my gave is dave hula and we build software for the industry. i am also a husband to my wife stephanie who is a cannabis marshmallow maker here in the city. these are some of the handicaps she has experienced trying to build this up for the last three years. with guiding text principles, the first is around equity and fairness. taxing similarly taxed payers and tax rates.

she is a marshmallow maker an and she can't get a bank, whereas another person that doesn't have noninfusion can do that. the second principle is the ability to pay taxes. taxes should be noncausing undue financial distress, and with her, she hasn't had the ability to deduct business expenses. she is looking at 20 to 30 percent of expenses not to be able to deduct, which is really difficult. the third economic growth and deficiency. we should not have tax policy group that punishes the growth of her business and just having four months to get a building permit to put an ada bathroom in the city has slowed down her

ability to work through this. the last point is minimizing noncompliance. the state already sees a big thriving black market because of the overregulation and taxation we have an opportunity to go another direction. >> good afternoon. i actually know both of you from when i worked downstairs in this building. in addition to the principles of tax policy group i have other considerations i would like to be present and central in this debate at all times. what place does the board of supervisors see for cannabis in the city's ecosystem. is the intent to nurture or encourage this industry? what is the extra tax revenue for, these businesses already

pay one gross receipt to tax. if a second is collected will it be leveraged for other campaigned throughout the commune. what about brings those currently under taxes and industries up to fairity instead of adding to an already ave overtaxed industry. although our idea is to tax cannabis in the same way other businesses are taxed, if the board is set on treating the business differently maybe that would bring us closer to what david just spoke of. there are many cities that look at cannabis and see a source of

tax revenue, but we don't have to do that. we are small businesses and have families and i hop let's be inclusive and fair and welcome this community instead of siloing it and feeding misconceptions. >> if there are any other speakers that would like to comment, please get in line. >> my name is loss gor dens and i work with california grower's association. i work around the state and at the state level. i think the idea that medical cannabis should not be taxed and there is a recognition that there is regulation with the market are important issues of

tax policy group. i think that the problems with competition with the unregulated market is hard to emphasize just how serious those are, and you may be a ware that first quarter tax numbers have come in and they are about 40% of what was estimated. it was 38 million and that was supposed to be closer to 80 million or so. even that underestimates the problem. so about 10% less than that of the cannabis being purchased is being purchased on a legal market. the average tax rate hoar in california on cannabis

businesses is quite a bit higher not just than other businesses but even cannabis businesses in other states. the average tax in california is 40% higher than the tax in colorado and about double that which is in oregon. this idea that there needs to be greater parity and how can we regulate without additional burdens on it, that kind of paradigm shift. >> i ran a business from 2015 to 2017 until i was a pre-existing non-conforming operator.

san francisco you guys have proposed one of the allowest tax rates in the state, so i can't really be mad at you, but i think you can do better. >> you're welcome. [laughter] >> san francisco has always been a leader and item 20 important to be a leader in progreesessive values in the city and you have the opportunity to lessen the burden on cannabis businesses here. it's already really expensive to do business in san francisco. we have talked about this before of the committee pound effect and i know that you have been looking at it so thank you again for that, but if you have one percent that you moved it too, it is still compounding on each

cultivation, manufacture, distribution, retail, plus sales tax, so all we ask is to be treated like every other business in san francisco. if we are going to tax more to help our equity partners and to help with education, sure, but just to tax simply because it's cannabis is not the way to be a leader in the state of california. thanks. thanks. >> good afternoon, supervisor cohen and supervisor fewer. i want to echo support from any of my colleagues because i am not an export. i came in as an artist, but as i

started to transition the business into a legalized structure, i started realizing the amount of money i was going to bring was in less too because i was going to are to pay employees and the amount that we pay on our properties is even taxed more properties were like $1.75 now they are like $4 for us. coming in here i was like 2% and then hearing the 1%, thank you for lowering it, but learning that is still more than other businesses are paying in fra san