Canna We Tax? Supervisors Consider Whether to Put a Marijuana Tax on the November Ballot
According to information attached to the tax measure, the “ordinance sets a local sales tax rate structure of $ 1 per square foot of outdoor cultivation area, $2 per square foot of mixed-light cultivation area or $3 per square foot of indoor cultivation area to be levied in the unincorporated areas of Humboldt County until ended by voters, and includes an annual consumer price index (CPI) factor.”
“One of the main reasons for cannabis regulation in Humboldt was to encourage small farmers and discourage large farmers,” Dani Burkhart, a founder of Emerald Heritage Farms. “This tax doesn’t do that.”
Allison Edrington a founding board member of the Humboldt County Cannabis Chamber of Commerce agrees, “Taxation could discourage [this] young industry.”
Burkhart worries that the young, white-market marijuana industry could collapse and send ripples through the County if the tax is implemented. “This is economic policy that will affect every business in the community, cannabis or not,” Burkhart stated.
Burhart isn’t against taxing marijuana growers though. “It’s reasonable that the supervisors want their slice of the pie,” she said. “The revenue potential is there.” However, small cannabis farmers, she said, could retreat back into the black market if faced with too onerous of a tax too soon. The County, Burkhart urges, needs a stable industry.
The proposed tax, she said, will come on top of the cost of getting permits which often require property owners to clean up messes left from the timber industry. In addition, there will be a state tax and farmers must pay federal taxes.
“Who knows what is going to happen in November?” Edrington points out. Marijuana might be legalized for recreational use. This could further depress marijuana prices but if the Consumer Price Index rose. The tax would rise even though the product would be worth less.
“Most young industries don’t face regulatory hurdles that high, Burkhart contended. Most, she said, get subsidized and helped.
Burkhart suggests that a progressive tax based on production amounts rather than on farm size could bring money to the county without unfairly burdening the small growers. Farmers who produce large amounts of cannabis would therefore pay the most amount of tax. This, Burkhart said, would discourage large farms and encourage small sustainable farms.
The proposed tax, she said, is bad in the short term for cannabis farmers. But more than that, she said, “It’s bad in the long term for Humboldt County. If there is not an industry to tax, this is bad for everyone.”
In other local cannabis regulation news:
- The Supervisors will also be looking at medical marijuana dispensaries at today’s Board meeting.
- Rio Dell will be discussing Medical Cannabis Commercial Land Use Regulations at its 6:30 p.m. meeting today also.