A municipality may impose a transfer tax on the sale of cannabis or cannabis items by a cannabis establishment located within the municipality. The tax may be imposed on:
- Receipts from the sale of cannabis by a cannabis cultivator to another cannabis cultivator;
- Receipts from the sale of cannabis items from one establishment to another cannabis establishment;
- Receipts from retail sales of cannabis items by a cannabis retailer to retail consumers; or
- Any combination thereof.
A municipality is free to set its own tax rate but in no case can the rates exceed:
- Two percent of the receipts from each sale by a cannabis cultivator;
- Two percent of the receipts from each sale by a cannabis manufacturer;
- One percent of the receipts from each sale by a cannabis wholesaler; and
- Two percent of the receipts from each sale by a cannabis retailer.
If a municipality adopts an ordinance providing for a transfer tax as noted above, the ordinance must also provide for a user tax. This user tax must be equivalent to the transfer tax rates, on any concurrent license holder, operating more than one cannabis establishment. The user tax allows for tax parity, by preventing vertically integrated cannabis establishments from avoiding the transfer tax.