ACTION REQUESTED:
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Communication from the City Manager and the Corporation Counsel with a Request to ADOPT an ORDINANCE Amending the CODE of the City of Peoria by Adding ARTICLE 19 (Municipal Cannabis Retailers' Occupation Tax) of CHAPTER 27 (Taxation) Imposing a MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX.
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BACKGROUND: On June 25, 2019, Governor Pritzker signed Public Act 101-0027, the Cannabis Regulation and Tax Act (the "Act"). In general, the Act legalizes private consumption and possession of cannabis for Illinois residents over 21 years of age.
Pursuant to Section 15-15 of the Act, any currently licensed medical dispensary under the Medical Cannabis Act, may, within 60 days of the effective date of the Adult-Use Cannabis Act, apply for an Early Approval Adult Use Dispensing Organization License. An Early Approval Dispensing License allows currently licensed medical dispensaries to sell both medical and recreational cannabis at their medical dispensaries. If approved for an Early Approval Dispensing License, the medical dispensaries may begin selling recreational cannabis and related items on January 1, 2020. The City currently has one medical cannabis dispensary.
The Act allows for imposition of a municipal tax under the Municipal Cannabis Retailer's Occupation Tax Law. The tax may be up to 3% of the gross receipts of cannabis products and must be imposed in 0.25% increments.
Currently, the tax will not go into effect sooner than September 1, 2020. However, we believe the City should adopt the attached ordinance imposing a 3.0% tax effective January 1, 2020 and certify the ordinance to the Department of Revenue by October 1, 2019 as a legislative amendment will likely authorize the local tax as of January 1, 2020. This will provide the City with all available tax revenue, should it not ban sales of recreational cannabis. The adoption of this ordinance does not affect the City's ability to prohibit the sale of recreational cannabis a...
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