REDDING, Calif. – The Redding City Council is considering approving tax increases on cannabis businesses.

The resolution, if approved, would increase taxes on everything from cultivating to manufacturing to selling marijuana products. “We’ll have to consider, is it the right time to do it now or is it the right time to address this later in the year?” Vice Mayor Mike Littau told Action News Now on Tuesday.

If passed, beginning July 1st this year, the cultivation rate in Redding would increase from $3/sq. ft. to $10/sq. ft., a 333% increase.

Plus, the manufacturing, processing, storage and distributing rate for businesses would increase from 3% to 4% of all gross receipts, a 33% increase overall.

On top of that, there would be an increase in the retailers rate from 5% to 7% of all gross receipts, a 40% increase overall. “We have a deficit of $5M right now and when we’re talking about trying to put more police in the field, hire more firefighters, and improve public safety, that’s what the community keeps telling us…we have $5M less to spend” Littau explained.

The increase in cannabis taxes could add $1M to the general fund over a single year, helping the City of Redding close its $5M deficit.

The deficit is due in part to the city’s sales taxes coming in well below expectations in 2023-24. The increase in cannabis taxes looks to boost that figure starting in the 2025-26 fiscal year.

But, Littau says he’s still undecided, and wants community input first. “Is it really fair to ask one group to be accountable for that tax increase that no one else is really going to pay?” he asked rhetorically.

I reached out to all three local cannabis dispensaries within the City of Redding. But, all of them declined to comment on this story, saying they wanted to see how tonight’s meeting would go first. “We could run out of money, and we’re not going to let the city run out of money” Littau claimed. “It just really comes down to if we can’t find a way to increase revenue, then the likelihood at looking to cut positions could become a reality in the future.”

The increases were first proposed by Mayor Jack Munns during a budget workshop back in January. 

Littau expects tonight’s meeting to be packed. If you’d like to make your voice heard inside Redding City Council chambers, the meeting begins at 6 PM.

Also tonight, the council will discuss the future of the Redding Sports Park.