Nevada City approves cannabis lounges and events, and cuts the medical excise tax
Nevada City just gave its cannabis businesses more room to operate and made medical cannabis more affordable for patients. On August 26 the City Council adopted an updated cannabis ordinance that removes the local 4% excise tax on medical-use cannabis, lets all licensed cannabis businesses apply for non-storefront retail licenses, allows licensed cannabis events like farmers markets and pop-ups, and clears the way for an on-site consumption lounge. If you run a cannabis business here, or you rely on cannabis as medicine, this affects you directly.
Cannabis Alliance Executive Director and Co-Founder Diana Gamzon spoke in support of the ordinance when the council introduced it on August 12, and the council returned on August 26 for the second reading and adoption. Here is what passed.
What the Nevada City Council approved
Medical cannabis tax. The city removed its 4% excise tax on medical-use cannabis, which lowers the cost for patients who use cannabis as medicine and possess a medical cannabis recommendation
Non-storefront retail. Any licensed cannabis business in the city limits can now apply for a non-storefront retail license, the delivery-only license that operates without a walk-in shop. That lets these businesses sell directly to customers through delivery or at licensed cannabis events across the state.
Cannabis events. Licensed cannabis events, including farmers markets and pop-ups, can now be held in the city. An organizer needs a Nevada City business license, a local events permit, and a state Department of Cannabis Control (DCC) cannabis event license, and the applicant must hold a DCC cannabis event organizer license. The council approves each event.
Consumption lounge. An established retailer can now run an on-site lounge where adults consume cannabis on the premises, under both DCC and city rules. That clears the way for a lounge at Elevation '2477, Nevada City's cannabis retailer in the Seven Hills Business and Arts District.
Where the Cannabis Alliance stood
We supported the ordinance, and we see it as a practical tool for economic goals the city already set for itself. The Nevada City Strategic Plan names business and cannabis support as a priority and points to cannabis tourism as an opportunity, and this language is how those goals start to become real.
On the consumption lounge, our support was specific. A lounge gives adults a safe, legal, and regulated place to consume cannabis rather than a private home or a public spot, and it draws visitors and foot traffic into an area. Those visitors tend to spend at nearby restaurants and shops, and the lounge itself generates local tax revenue.
Cannabis events are worth taking seriously as economic development. Nevada County already sees more than 300 million dollars in annual visitor spending, and licensed events bring in new visitors who spend on lodging, food, and retail, which means more sales tax, cannabis tax, and lodging tax flowing to the city.
On the medical tax, we supported removing the city's 4% excise tax on medical-use cannabis. Cutting it lowers the cost for patients who rely on cannabis, improves access, and can bring new patients into Nevada City, which grows the local sales tax base over time.
What this means going forward
The ordinance is adopted and will go into effect in 30 days. For our community that means real tax relief for medical patients, a new path for cannabis businesses to sell direct, a clear route for cannabis events in the city, and the groundwork for Nevada City's first consumption lounge. We advocated for these changes at both hearings, and we will keep working with city staff on how they get put into practice.
Read the ordinance and staff report in the city's agenda packet: City of Nevada City Agenda Center
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