Photos: Coastal Dispensary opens on South J St in Lompoc

Cannabis flowers are displayed during the grand opening of Coastal Dispensary at 124 South J St. in Lompoc.

An overwhelming majority voted in support of Measure Q2021, which calls for a new taxation schedule that significantly increases tax on cannabis manufacturers and distributors doing business in the city of Lompoc.

The measure, which was added to the Sept. 14 gubernatorial special election ballot by Lompoc voters via a special mail-in ballot election held on Aug. 31, will generate an estimated $1.2 million in annual revenue for the city based on existing businesses, according to reports.

Final election results show that out of 6,460 votes cast, 76.03% of voters favored the measure, while 23.97% voted against. 

According to Mayor Jenelle Osborne, no immediate actions will be taken prior to April 1, 2022, when collection of the new tax rate is set to begin.

Industry professionals, however, will receive a notice from city officials after election results are confirmed in 30 days and a reminder closer to the date of implementation of the new tax, Osborne said.

Businesses that will be impacted include cannabis manufacturers and distributors, while dispensaries and testing labs such as Merso Labs in Lompoc — which conducts cannabinoid testing up and down the Central Coast — will remain largely unaffected, Osborne said.

"What did change for dispensaries is the ability to actually print this rate on receipts of purchase and not 'absorb' the tax," she added.

Currently, qualifying cannabis businesses with a net income of $2 million pay a flat fee of $15,000 annually, while those with a net income above $2 million pay a flat $30,000 to operate out of Lompoc. 

The new measure puts into effect a sliding tax schedule that will begin at half a cent per dollar for annual gross revenues of $10 million or less, which works out to $50,000 based on $10 million. The schedule goes up in increments of half a cent — 1% for revenues $10 million to $25 million, 1.5% for revenues $25 million to $40 million, and 2% on revenues $40 million to $55 million — and caps out at 2.5 cents per dollar for revenues of more than $55 million.

Ultimately, revenues collected will go into the general fund, which is used for public safety, parks, streets and the library.

"All of these areas have imminent and large needs, so these funds won’t solve all of the problems, but it will allow us to begin to repair and improve Lompoc," Osborne said.

Lisa André covers lifestyles and local news for Santa Ynez Valley News and Lompoc Record. 

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