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On March 4, nearly every one of the 198 seats in Redding’s Council chambers was occupied as the unmistakable scent of marijuana wafted through the air. 

The vast majority of those in attendance were connected to Redding’s cannabis industry–including those who make their living from cultivating marijuana in legal commercial facilities or selling products at dispensaries. Growers and distributors appeared at the Council meeting in droves to oppose a proposed fee increase that would have more than tripled their cultivation costs, while also increasing costs for the manufacturing, processing, storage, testing and distribution of marijuana, as well as sales. 

The City of Redding is facing a looming $5 million dollar deficit, and the Council has been strategizing how to prioritize spending cuts and generate new revenue, through added fees like the ones recently proposed by staff on marijuana production and sales. 

Ultimately, a Council compromise, proposed by member Erin Resner, passed 3 to 2. The decision means Redding will increase business taxes on cannabis cultivators to $5 per square foot, up from the previous $3, but still significantly less than than the $10 per square foot originally proposed by staff. Resner’s winning motion also includes a 1% increase for manufacturing (to a 4% fee) and 1% increase for retail sales (to 6%). The $5 cultivation charge and 6% sales tax is equal to that of Shasta Lake City, which saw a boost of cannabis businesses in 2018 when it opened up part of an industrial park to non-retail marijuana industry. 

To provide additional context, Redding’s newly-decided $5 per square foot tax compares to fees in Lake County of $1 per square foot for outdoor grows, $2 for mixed-light, and $3 for indoor, rates that on the low end of the spectrum statewide. On the higher end, the city of San Jacinto in Southern California imposes $5 per square foot for outdoor cultivation, and $10 for indoor cultivation. Redding’s resolution did not differentiate between indoor and outdoor cultivation. 

Community members prepared a number of well-researched arguments in opposition to the tax increase, which, they said, would dramatically affect both the price of legal cannabis products and their ability to stay in business.

“I just want everyone to raise their hand if they oppose this tax,” said Laythen Martines during public comment. Martines is  the founder of the mutli-location dispensary Sundial Collective, with shops in Redding, Banning, Bishop and Red Bluff. The vast majority of attendees shot their hands in the air. “They’re your constituents. This is a very important issue,” Martines warned the Council. 

The Council reached a decision only after bartering and bickering amongst themselves and contending with a disgruntled crowd that could at times barely be contained by Mayor Jack Munns, even with the help of City Manager Barry Tippin and Council member Dr. Paul Dhanuka.

Fourteen public commenters (all of whom opposed the resolution) warned that if, as proposed, the City of Redding imposed heavier taxes on every step of cannabis production–from marijuana seedling to pre-roll–much of the City’s legal cannabis industry would either disband or relocate to more business friendly municipalities like the City of Shasta Lake, leaving a vacuum to be filled by illegal grows. 

Nearly a decade ago, when Proposition 64 passed in 2016, some small-scale entrepreneurs poured their life’s resources into the booming legal weed industry. Years later, many business owners’ investments have buckled under the oversaturated market, weight of increasing fees and taxes, and an overall decrease in California’s marijuana sales.

The Council’s debate exposed major fault lineson the issue of marijuana use. After hearing from the public, Council members were initially completely divided on how to proceed. Some wanted to delay the decision altogether, while others called for passing a lower tax rate increase.

Only Council member Tenessa Audette backed staff’s recommendation for the full 233% increase in taxes on cannabis cultivation. Pointing out that taxation on cannabis cultivation in Redding has not increased in seven years, she suggested the increase to $10 per square foot was reasonable. 

“The cost of business continues to increase for everybody in California,” Audette said, adding that the cannabis industry shouldn’t expect to be immune from the cost of doing business and emphasizing that the City faces the potential loss of public safety personnel due to the budget deficit.

“For the privilege of getting to use drugs, you supplement public safety for that. That’s just how that works,” Audette told the public.

Angered, some community members openly discussed “voting her out” from their seats as their voices rose to meet hers from the floor of the chambers.

Audette also hounded her fellow Council members–interrupting and talking over them–as it became clear that a vote for even a $7 dollar increase in cultivation didn’t have support. Growing increasingly agitated, she accused her colleagues who disagreed with her of “pandering to a crowd.” 

Resner held her line, calling for a moderate tax increase and responding to one particularly shrill litany of objections from Audette with the deadpan phrase: “you cannot wear me out.” The chamber responded with laughter and cheers. 

Audette was one of only two Council members to voted agains the tax increase because she felt Resner’s proposal didn’t go far enough. Dhanuka also voted no saying the City had unfairly singled out the cannabis industry to make up for financial losses.

“I do not think that we should be balancing our budget based on the back of a single business,” Dhanuka said.

The increase in the City’s cannabis tax rate will do relatively little to close the City’s $5 million budget gap. It’s expected to bring in just a few hundred thousand dollars more, per year. Passing the rates proposed by staff, which Audette supported, would have brought in between $700,000 to $1.3 million, according to a staff report. That depends, of course, on whether those higher rates would have driven businesses out of town, or underground.

After a presentation from Director of Community Services Travis Menne, Council members agreed to continue to support in-house management of the Redding Sports Park, for now.

Nine members of the public, the youngest of whom was 12, spoke to the Council, underscoring how the current facilities help improve youth mental health, provide recreation, and generate tourist revenue as people from all over the North State utilize the multipurpose building.

Menne’s presentation laid out the financial groundwork for city’s management of the Sports Park, which he characterized as a very conservative approach. Using operating costs from the Aquatic Center to help determine Sports Park costs, Menne estimated the City’s operating costs for the Redding Sports Park at $118,170 through the end of June.

Moving into fiscal year 2025/2026, Menne said, costs are estimated at $413,000, dropping to $283,000 in the next fiscal year. The bulk of costs will go to staffing, Menne said. He also discussed outside funding streams that could work toward improving the park’s operating cost, including energy efficiency grants, corporate sponsorships, and in-house programming.

The Sports Park’s central challenge continues to be how to generate the approximately $5 million it will cost to replace turf, an update which will need to be made within the next few years for safety reasons.   

While the Council’s vote authorizes City staff to hire for necessary positions at the Redding Sports Park the Council has not yet made a full commitment to including the program in the next fiscal year budget, which will launch in July. Deciding priorities for that budget will happen as part of larger Council conversations in the coming months.

To provide the needed minimum revenue guarantee to support the start of a new United Airlines roundtrip flight service to Denver, Redding has solicited funds from a number of different partners, including the County. United Airlines required a $2 million revenue guarantee. The City has already raised $1.6 million of those funds, including $100,000 offered by the County.

During a tense discussion, Council members voted not to accept the terms stipulated by County Supervisors as part of the Board’s offer of a second $100,000 to help meet that gap. Supervisors had voted to provide the funds only if the City agreed to use the County’s money last, and if the County also agreed to enter into conversation about the possibility of forming a joint powers agency between the City and County for future airport management. 

The Council first voted unanimously to send a letter to the Board rejecting those conditions which the City Manager Tippin said would set a poor precedent.

The Council then held a second discussion about whether to meet with the Board about the possibility of a future joint powers agency for shared airport management.

Referring to the Board’s request as a this-for-that, also known as quid pro quo, Council member Erin Resner flatly dismissed the idea of engaging in conversations with the County over airport management, saying there was no reason to discuss the matter if the City has no intention to move forward on joint airport management. She was strongly supported in this position by Redding Mayor Jack Munns.

Council members Audette and Dhanuka opposed Resner and Munns, arguing that agreeing to a simple conversation was an appropriate response to the County’s friendly request. Littau initially took a middle line, but eventually swung to support the idea of engaging in conversation with no promise of future negotiations.

After Supervisor Chris Kelstrom weighed in from the dais, the Council eventually voted unanimously to have Council members Resner and Dhanuka meet with one or more Supervisors for a conversation on airport management.

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