Terrace Dispensary, Moline's first cannabis dispensary, is open for business at 2727 Avenue of the Cities, Suite 7. CREDIT KENDA BURROWS
Before dashing off to a ribbon cutting at Moline’s second cannabis dispensary today, Dec. 8, Mayor Sangeetha Rayapati was telling reporters that $300,000 to $500,000 in tax revenue from its first legal pot shop could be lost. In addition, the city’s potential tax dollars from the first several months of operation at the newly opened […]
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Before dashing off to a ribbon cutting at Moline’s second cannabis dispensary today, Dec. 8, Mayor Sangeetha Rayapati was telling reporters that $300,000 to $500,000 in tax revenue from its first legal pot shop could be lost.In addition, the city's potential tax dollars from the first several months of operation at the newly opened Revolution Dispensary could be forfeited through July of 2024 due to a three-year-old filing oversight.The mayor said she called the impromptu news conference at Moline City Hall today because “I wanted the community to know important information sooner rather than later.”Moline’s cannabis tax dollars are in jeopardy, she said, because when the Moline City Council passed the ordinance in March 2020, the proper paperworkwas not filed with the state at that time as required by law. That meant, she said, that the city missed the April 1, 2020, deadline that would have allowed Moline to start receiving its 3% local tax by July of the same year. Ms. Rayapati said the error was discovered when the current city staff sought the distribution of 2023 tax revenue from the State of Illinois generated by Terrace Cannabis, the city’s first dispensary, which opened in late July.“We have since filed the ordinance but due to state deadlines, we will not be able to collect cannabis tax revenues from the state until July of 2024 – effectively delaying expansion of our revenue streams by approximately one year,” Ms. Rayapati said.
City trying to recover funds
At the same time, she said, “We are also pursuing avenues for collection of the tax sooner than this coming July.”The process isn’t a straightforward one in Illinois. Dollars don’t go directly to Moline, the mayor told reporters. The stores pay them to the Illinois Department of Revenue, which then redistributes them to municipalities around the state. “We are administratively trying to seek other solutions to get those dollars earlier than the July 2024 date,” she said. For example, the city will be looking at whether the revenue department collected any taxes on the city’s first dispensary and whether or not they can be recovered by the city. In the meantime, she said, because of conservative budgeting and the city’s philosophy of budgeting cannabis taxes as “opportunity revenue” to be used for expanding services rather than paying for essential ones, “this error will not significantly impact our 2024 budget.” The mayor also expressed regret over the error, which she said happened under a previous administration and staff. “Needless to say this development is extremely disappointing,” she said. “It’s the kind of situation my family would characterize as just a ‘damn shame.’”When asked how the mistake happened or why it took three years to discover, she declined to point fingers. She did, however, say that the oversight occurred before any of the current staff or administration were in office.“All I can say is that there was a period of chaos at the City of Moline in 2020,” Ms. Rayapati said. “You cannot have interims and missing directors and chaos because it leads to errors in oversight.”
City works to prevent repeat
She also stressed that the current administration and staff is taking steps to ensure a similar mistake doesn't happen.“This type of error from the past allows us to reinforce procedures to avoid these kinds of mistakes and while I remain disappointed in past process failures, I’m thankful we have better opportunities for administrative oversight than we had in 2020, and we are continuing to look at solutions not 'this problem,'” the mayor said.She also expressed confidence in the current process.“With consistent administrators here on this staff, and consistent staffing in our executive and administrative branch we have definitely sought to close the loop on any legislation that comes forward: Who’s responsible? Has it gotten done?” she said. “That’s a process that’s in place.” The city also is working to bring back Moline’s inhouse legal director to prevent additional legal oversights.“In the meantime we will continue to focus on this problem and look forward to the new jobs and economic activity created by the opening of a second cannabis dispensary this morning,” she said of the Revolution Dispensary at 4301 44th Ave. “And we are also pleased to be filling formerly dark storefronts.”
