Cannabis tax revenues plummet after soaring car theft, crime rise in San Francisco

The new cannabis tax in San Francisco is funding a drug dealer-busting program that the city has previously said would go after companies that were making a profit from cannabis instead of creating new jobs. But a nationwide epidemic of car thefts, gang violence and other violent crimes has pushed the tax revenue to the bottom of the city’s priorities.

The San Francisco Board of Supervisors passed the city’s largest ever tax on cannabis last November in an effort to fund the creation of 40 new jobs with 1,500 square feet of retail space and the purchase of 20 new police vehicles.

The tax, which went into effect in January, requires companies that want to obtain a license to grow, process, dispense or sell recreational cannabis to pay a $7.50 fee per square foot.

The city’s robust economy and a resounding defeat of Proposition 19, which would have legalized recreational marijuana in California, helped justify the collection of the tax.

“The reality is the state of California has had a sea change in its attitude about recreational marijuana,” Scott Wiener, one of the supervisors who sponsored the law, told Fox News on May 4. “We think the industry in San Francisco that we were going to be creating jobs is going to make a real contribution and the economic benefit could be meaningful.”

However, San Francisco, like most American cities, is facing a severe crime problem.

San Francisco has the highest murder rate of any U.S. city and is grappling with an epidemic of auto thefts — a crime that requires only a key to steal.

“Over the last five years, cars have been the No. 1 violent crime in San Francisco,” Chris Beathard, San Francisco’s police chief, told the San Francisco Chronicle.

Last year, while car thefts were declining nationwide, they rose 17 percent in San Francisco. Beathard said that cops are being forced to focus their resources on street gangs that threaten every kind of business in the city, including newsstands.

Local law enforcement officials said that criminals have been abandoning stolen cars to break into businesses — which are now vulnerable to break-ins because the main parts in stolen cars are removed. The stolen vehicles are then resold.

“We’re looking at lots of illicit sales,” Beathard said. “From a safety and security standpoint, it is a huge issue.”

After this crime surge caused by thefts, the city’s cannabis tax revenues has plummeted to $70,000 — not enough to keep pace with the $10.1 million it will cost to police the expected tax filers who look to shop in the city’s Cannabis City outlets.

According to, which runs the cash-to-cash cannabis exchange, all users pay a $10 fee for their transactions and all parts are delivered by cash as required by state law.

Since the launch of CannaTrek in March, 65 transactions have taken place at locations throughout the city.

“CannaTrek is different than traditional dispensaries,” the website says. “Don’t expect the extensive security that a traditional dispensary may offer. You are going to leave your car keys in the parking lot, and you will need to make a cash transaction instead of a credit card payment. You will see real world people physically taking your cash instead of vending machines. The people at CannaTrek work with you to make sure that your purchase gets to you safely and get the best possible price.”

The site says it has a “vast track record” and is based in San Francisco.

“You are about to spend your 15 minutes of freedom on the highest valued item in the whole history of mankind. The last time I checked, no one actually enjoyed the pen you are going to put it in,” the site said.

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