Dear Esteemed Members of the City Council,
As the San Diego Chapter of Americans for Safe Access, a national non-profit dedicated to advancing safe access to cannabis for therapeutic use and research, we are writing to express our strong opposition to the proposed increase in San Diego’s cannabis business tax.
Within the City of San Diego, consumers already pay over 30% in taxes at the final point of sale—including an 8% cannabis business tax, a 15% cannabis excise tax, and a 7.75% sales tax. In addition, the cannabis excise tax is currently set to increase another four percentage points this summer. If both tax increases are adopted, San Diego consumers could soon be required to pay up to 6 percentage points more for legally acquired cannabis products—almost 40% in total taxes. This increase will impact all cannabis consumers but will place a particular strain on both patients and small and mid-sized cannabis businesses, threatening equity in access and cannabis business ownership while undermining public health goals and sustainable revenue generation.
This proposal is particularly harmful to patients in San Diego. Cannabis is not just a recreational product for medical cannabis patients—it is essential medicine. These patients do not have access to insurance coverage to assist with their cannabis needs, and current tax rates already create significant financial barriers to access. This proposed increase would exacerbate those challenges, making it even more difficult for patients to afford their medicine. Worse yet, it could push patients to seek cannabis products from unregulated sources, jeopardizing the safety and efficacy of the products they consume.
In addition to the impact on patients, looming tax increases are also a cause for concern for small and mid-sized cannabis businesses in the region. While larger corporations, with their vast resources, are better positioned to absorb tax increases, smaller businesses are more vulnerable. With high operational costs, a complex and labor-intensive regulatory environment, and fierce competition from both large corporations and the unregulated market, many of these businesses already struggle to stay afloat. An additional tax burden could force many smaller cannabis businesses, particularly those owned by Black, Indigenous, and people of color, to close their doors, leading to closures, layoffs, and a reduction in the diversity of businesses within the legal cannabis market. To help those most impacted by Drug War policies thrive in the now-legal market, it is therefore essential to prevent further tax hikes while also implementing robust cannabis social equity programs.
Increasing cannabis taxes would also reduce the ability of licensed cannabis businesses to compete with the unregulated market. In California, the sale of unregulated products already presents a serious challenge to the legal cannabis industry ($8 billion annually), as consumers seek out cheaper, untaxed products from illicit sources—even as state and local officials invest enormous public resources into eradicating these suppliers. By raising taxes on legal cannabis, the city could unintentionally push more consumers to shop from the unregulated market, where products are less likely to be tested for safety, potency, and contaminants. It could also prevent would-be licensed operators from entering or remaining in the regulated market. This could not only undermine the goals of the legal cannabis industry but also create additional public health risks and loss of future tax revenue.
For all of these reasons, the San Diego chapter of Americans for Safe Access urges the City Council to reject this proposed tax increase. It is crucial that we protect access to medicine for patients, support small businesses, and ensure the legal cannabis market remains a safe and viable option for consumers.
Thank you for your consideration.
About the San Diego Chapter of Americans for Safe Access
The San Diego Chapter of Americans for Safe Access (ASA) is the local chapter of the largest national member-based organization of patients, medical professionals, scientists, and concerned citizens promoting safe and legal access to cannabis for therapeutic use and research. ASA works to overcome political and legal barriers by creating policies that improve access to medical cannabis for patients and researchers through legislation, education, litigation, grassroots actions, advocacy, and services for patients and their caregivers. ASA has over 150,000 active members with chapters and affiliates in all 50 states. San Diego ASA helps protect the rights of cannabis patients. We are working to change local and federal policy to meet the immediate needs of patients as well as create long-term strategies for safe access and programs that encourage research.
