Cannabis industry sees increase in 2019 tax revenue in Salinas

SALINAS, Calif. (KION) A new report suggests that the Salinas cannabis industry is seeing an increase in tax revenue.

Tax revenues went up by $167,000 from 2018 to 2019, and the fourth quarter of 2019 is still to be counted. The taxes collected have come from seven businesses.

Despite the numbers, the authors of the report said it is unclear whether tax revenue will increase again in 2020. The report said that is because of instability in the market that has affected sales and may lead to the closure of some cannabis businesses.

"While the industry has grown, a high degree of uncertainty remains regarding the sustainability of the businesses that are in operation. Several factors have created market volatility, such as the illegal cannabis trade and costs associated with operating a legal cannabis business," the report said.

To keep businesses open, the authors of the report suggest lowering the business tax rate or reducing fees to stabilize the long-term tax revenue.

The city report also said no crime happened on the property of a commercial cannabis business in 2019.

The report will be presented to the Salinas City Council at its next meeting Tuesday evening.