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Will a new San Diego County cannabis tax make the industry safer and fairer?

San Diego County voters will decide in November whether to authorize a tax on marijuana businesses operating in unincorporated parts of the county, after the Board of Supervisors approved ballot language for the countywide measure.

The board passed the ballot statement in a split vote Tuesday, with Supervisors Nathan Fletcher, Nora Vargas, Terra Lawson-Remer and Joel Anderson in favor and Supervisor Jim Desmond opposed. The majority said the measure would let county officials and law enforcement regulate the legal cannabis trade and crack down on black-market pot shops.

There are currently only five legal cannabis businesses operating in the unincorporated county. The Board of Supervisors is overhauling its cannabis regulations to transition from a restrictive model to a system that accommodates numerous companies, from cultivation, production and testing to retail sale and consumption lounges. The tax measure is one piece of that effort.

The argument in favor of the ballot measure calls it “a bipartisan solution to advance a safe, regulated, and legal adult cannabis market in San Diego County.”

On Tuesday, the measure drew sharp criticism from members of the public, including those in favor of expanding the legal cannabis industry and those fighting against it.

Marijuana business proponents said the measure doesn’t guarantee that tax revenues would support the board’s stated goal of achieving social justice for communities harmed by the war on drugs.

Others who oppose expanding marijuana business permits said the proposed tax measure wouldn’t benefit the rural communities where the new businesses would be located, and doesn’t account for the health and safety costs of increased marijuana use.

“It puts all the harms, hazards and risks of marijuana business expansion on rural areas, with no guarantee of tax benefits, nor does it guarantee a safe, regulated adult tax market,” speaker Peggy Walker said.

Kelly McCormick, a public health educator, said that the supervisors supporting the measure were “not being transparent about the costs” of marijuana, such as burdens on law enforcement and healthcare systems and psychiatric risks to young users, citing paranoia, psychosis and suicide attempts. “These are the costs that we should be taking about, and nobody is.”

Several proponents of marijuana business expansion argued that the tax would contribute to the county’s general fund to the benefit of backcountry communities but that it wouldn’t advance the board’s goal of repairing damage from the war on drugs.

“The county has sold this as a social equity tax to repair the effects of the war on cannabis, not just another tax to generate revenue for the rural fund,” said speaker Justin Joseph of Rise Up San Diego, a racial justice advocacy organization.

Anthony Avalos, a member of the San Diego County Cannabis Stakeholders Group, which advocates for owners and employees of marijuana businesses, said tax revenue should be directed primarily toward helping disadvantaged communities enter the cannabis industry.

“Social equity committee members continue to be disappointed that this is a general tax, not a special tax to repair the harms by the war on cannabis,” he said.

Speaker Paul Henkin said the county should impose a sales tax instead of a business tax, arguing that a tax on consumers would be fairer to small businesses with a limited selection of cannabis products. He called it discriminatory to allow all county voters to weigh in on a tax that affects only unincorporated areas.

Supervisors have argued that expanding legal marijuana businesses would provide tax revenue for enforcement and suppress the market for illegal operations. It would also enable low-income people, minorities and others targeted by punitive marijuana laws to reap benefits of legalized cannabis, they say. The tax measure is part of a broader effort to update county cannabis rules.

The measure would tax cannabis businesses only in unincorporated San Diego County, the ballot argument says, noting that it is not a sales tax on customers.

“These tax revenues will stay within San Diego County to fund general County purposes, including but not limited to, parks, fire safety, roads, health, social equity, and increased enforcement of illegal cannabis operations,” the language of the measure says.

Although all San Diego County voters will be asked to weigh in on the measure, the tax would apply only to marijuana businesses in unincorporated county area such as Ramona, Lakeside and Fallbrook and would not be levied on businesses within city boundaries.

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