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Urbana mayor and city council want input on cannabis sales

A listening session regarding the sale of cannabis in Urbana will take place Monday evening at the city council chambers, immediately following the regular city council meeting which begins at 7 p.m. While use of recreational cannabis will be legal in the state of Illinois on January 1st, municipalities can still prohibit its sale and regulate dispensary locations. As well, local governments can impose a 3% tax in addtion to sales tax. If fully taxed, the city of Urbana could generate an additional $275,000 to $550,000 annually, which can be used to offset several recent cuts in full-time equivalent positions. Read the full press release below:

Urbana Mayor Diane Wolfe Marlin and the City Council want to hear input on cannabis sales in the City of Urbana. The City Council will hold a listening session on this topic immediately following the regular City Council meeting, which begins at 7 p.m. on Monday, August 19.

A new state law legalizes use of recreational cannabis in the State of Illinois beginning January 1, 2020. Local governments may not prohibit use of recreational cannabis, but may prohibit its sale and regulate the location of dispensaries. Local governments may also impose a tax, in addition to sales taxes on recreational cannabis, in an amount up to 3% of the purchase price.

The current medical cannabis dispensary located on University Avenue will be permitted to operate a recreational dispensary at the same location beginning January 1, if there is no action by the City to prohibit that. Other dispensaries may be licensed by the State in the future. For each local dispensary, a 3% cannabis excise tax could generate $150,000 to $300,000 in revenue for the City, in addition to sales taxes of $125,000 to $250,000.

City resources have been stretched over the past few years resulting in elimination of more than ten full-time equivalent positions. Without new revenue, further cuts would be required in the upcoming fiscal year. Revenue from local cannabis sales could help to address the budget gap and preserve vital City services.

The City Council is expected to consider a tax on recreational cannabis on August 26 and September 3.

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