LA Council Watch

← All files

Cannabis Business Tax Relief Program / Tax Exemption / Temporary Local Tax Relief / Good Standing

Council File 25-1126

In progress — the City Attorney has drafted ordinance language to let cannabis operators refile cancelled licenses and set up payment plans for back taxes. The Budget and Finance Committee is reviewing it before a final Council vote.

Introduced
2025-09-26
Last changed
2026-06-16
Status
open
Expires
2028-06-12
Committee
Budget and Finance Committee
Mover
JOHN S. LEE
Second
EUNISSES HERNANDEZ
References
City Attorney Report: R26-0297; R26-0295; R26-0296

Brief

Councilmember John S. Lee introduced a motion to establish a Cannabis Business Tax Relief Program offering temporary local tax exemptions for cannabis retailers and operators meeting good-standing requirements. The Council adopted the measure 13-0-2 on April 15, 2026. The file is currently pending in Budget and Finance Committee and Government Operations Committee following City Attorney reports on implementation and fiscal impact submitted in May 2026.

Full summary

Councilmember John S. Lee, seconded by Eunisses Hernandez, introduced this motion in September 2025 in response to a sharp decline in the legal cannabis market. The motion cites a 20% drop in LA city cannabis sales in early 2025, a state excise tax hike from 15% to 19%, and the persistence of an unlicensed market as forces pushing licensed operators to the brink. Many operators have accumulated significant back-owed taxes, but under existing city code, any delinquency on city taxes — regardless of amount — disqualifies a business from renewing its license by placing it out of "good standing." The motion argued this all-or-nothing standard was counterproductive and pushed the motion to revise the good-standing provision and design a formal tax relief program. The motion directed the Department of Cannabis Regulation to report on revising the good-standing definition as it relates to back taxes, and instructed the Office of Finance — with help from the Department of Cannabis Regulation, City Administrative Officer, and City Attorney — to develop recommendations for a Cannabis Business Tax Relief Program modeled loosely on San Francisco's suspension of its Cannabis Business Tax, with options for relief periods of 3, 6, 9, and 12 months. The underlying policy goal is to help operators become current on their taxes, sustain continuous operations, increase city revenue long-term, and undermine the illicit market. The file moved through Government Operations Committee and Budget and Finance Committee in fall 2025, with both committees approving the measure. The full Council adopted the motion on December 5, 2025, with the action becoming final December 10. A second round of committee review followed in early 2026, with Government Operations Committee approving the item as amended on March 3, 2026, and Budget and Finance Committee concurring on March 23. The Council adopted the item again on April 15, 2026, by a 13-0-2 vote, with the action becoming final April 20. In May 2026, the City Attorney submitted draft ordinance language to implement aspects of the program. One draft ordinance would amend the Municipal Code to allow an applicant whose annual cannabis license was cancelled before its expiration to refile that application, and would allow the applicant to pay — or enter into a payment plan to pay — previously owed taxes, fees, or fines at the time of refiling. Government Operations Committee approved these amendments and transmitted the file to Budget and Finance Committee in early June 2026. The Budget and Finance Committee has scheduled the matter for its June 16, 2026 meeting, where the draft ordinance language is expected to receive further review before any final Council action.

Activity (33)

  • 2026-06-16 Budget and Finance Committee concurred with the Government Operations Committee's action of June 2, 2026.
  • 2026-06-12 Budget and Finance Committee scheduled item for committee meeting on June 16, 2026.
  • 2026-06-02 Government Operations Committee transmitted Council File to Budget and Finance Committee.
  • 2026-06-02 Government Operations Committee approved item(s) .
  • 2026-05-29 Government Operations Committee scheduled item for committee meeting on June 2, 2026.
  • 2026-05-28 OFFICE OF FINANCE REPORTS DATED MAY 21, 2026 and MAY 26, 2026 MOVED TO CF 25-0600-S125.
  • 2026-05-26 Office of Finance document(s) referred to Budget and Finance Committee; Government Operations Committee.
  • 2026-05-26 Document submitted by Office of Finance, dated May 26, 2026.
  • 2026-05-22 Office of Finance document(s) referred to Budget and Finance Committee; Government Operations Committee.
  • 2026-05-21 Document submitted by Office of Finance, dated May 21, 2026.
  • 2026-05-20 City Attorney document(s) referred to Budget and Finance Committee; Government Operations Committee.
  • 2026-05-20 Document submitted by City Attorney, dated May 20, 2026.
  • 2026-04-20 Council action final.
  • 2026-04-15 Council adopted item, subject to reconsideration, pursuant to Council Rule 51.
  • 2026-04-10 City Clerk scheduled item for Council on April 15, 2026.
  • 2026-03-23 Budget and Finance Committee concurred with the Government Operations Committee's action of March 3, 2026.
  • 2026-03-19 Budget and Finance Committee scheduled item for committee meeting on March 23, 2026.
  • 2026-03-04 Government Operations Committee transmitted Council File to Budget and Finance Committee.
  • 2026-03-03 Government Operations Committee approved as amended .
  • 2026-02-26 Government Operations Committee scheduled item for committee meeting on March 3, 2026.
  • 2026-02-17 Government Operations Committee continued item to a date to be determined.
  • 2026-02-11 Government Operations Committee scheduled item for committee meeting on February 17, 2026.
  • 2025-12-16 Department of Cannabis Regulation document(s) referred to Budget and Finance Committee; Government Operations Committee.
  • 2025-12-15 Document submitted by Department of Cannabis Regulation, dated December 15, 2025.
  • 2025-12-10 Council action final.
  • 2025-12-05 Council adopted item, subject to reconsideration, pursuant to Council Rule 51.
  • 2025-12-02 City Clerk scheduled item for Council on December 5, 2025.
  • 2025-11-04 Budget and Finance Committee concurred with the October 21, 2025 action of the Government Operations Committee.
  • 2025-10-30 Budget and Finance Committee scheduled item for committee meeting on November 4, 2025.
  • 2025-10-21 Government Operations Committee transmitted Council File to Budget and Finance Committee.
  • 2025-10-21 Government Operations Committee approved item(s) .
  • 2025-10-17 Government Operations Committee scheduled item for committee meeting on October 21, 2025.
  • 2025-09-26 Motion referred to Budget and Finance Committee; Government Operations Committee.

Documents (35)

Council votes (1)

  • 2026-04-15 Adopted — 13-0-2 · Regular

View on CFMS →