Finance staff recommended maintaining Rheonale’s cannabis cultivation tax at $2 per square foot and told the council the rate produces roughly $258,000 annually on a five-year average, representing about 14.5% of general fund revenue.

Finance Director Travis Samuel (presenting) said voters authorized the tax in 2016 and again in 2017 and that the city could tax up to $5 per square foot; the city currently operates at about 40% of that maximum. Staff noted reducing the rate to $1.50 per square foot would lower annual revenue about $64,500, and lowering it to $1 would reduce revenue about $129,000 per year.

Council members voiced differing perspectives during discussion. One councilmember urged keeping the rate to honor the voter mandate and protect services; another councilmember suggested a reduced, temporary rate might retain businesses and associated sales tax. Staff told the council the item technically required no formal council action to maintain the existing rate.

No change to the city’s $2-per-square-foot cultivation tax was adopted at the meeting; staff’s recommendation to maintain the rate stood and the council moved on to the next item without a formal motion recorded.