In a boost to a fledgling industry, the Berkeley City Council slashed the city’s recreational cannabis tax rate in half Tuesday to attract and keep businesses in town.
The tax rate, now 5 percent, is among the lowest in the Bay Area and could put pressure on neighboring cities to cut theirs, too.
Critics decried the move as a relinquishing of vital funds after just six weeks of legal adult-use sales. They pointed out that no formal analysis had been done to show whether the possible benefits spurred by new business creation would offset the losses in city revenue.
But business owners and council members said the legislation, introduced by Mayor Jesse Arreguin, was an attempt to level the playing field and bring cannabis in line with other industries. They said the old rate of 10 percent was arbitrary from its inception.
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