Humboldt County’s Proposed Tax on Cannabis: The Cannabis Chamber of Commerce Opposes It

Humboldt County’s Cannabis Chamber of Commerce opposes a proposed tax measure aimed at marijuana growers. Here’s their letter below:
Money and marijuana feature

On August 9th the Humboldt County Board of Supervisors is set to take the final step to bring a tax measure targeting cannabis cultivators to the ballot in November. This measure has been hotly debated and has undergone substantive changes at every meeting at which it was addressed. In its final form it imposes a flat tax based on canopy space, with a multiplier based on lighting type. As it’s written, this tax fails to address the stated goals of the Supervisors and endangers the long term health of an industry that comprises 60% of our local economy. Humboldt County’s Cannabis Chamber of Commerce opposes this measure

Humboldt County’s goals for the cannabis industry have evolved in the last few years as farmers have come forward to engage the county to set a path for compliance. The entire state looks to us for wise, enlightened policy that addresses community concerns. We finally have the opportunity to address the environmental impacts, labor issues, and community divisions that have arisen during Prohibition as a result of our unregulated cannabis industry. The Supervisors have repeatedly voiced a desire to protect small and cottage farmers as they navigate these new laws. A wise tax policy could ensure Humboldt’s sustainability for the rest of the century. The measure being put forward not only fails to provide economic sustainability, but will actively decrease our resources to achieve it. This will set a terrible example to the rest of California’s counties as they consider their own tax policies. MMRSA clearly states that cannabis cultivation is an agricultural activity, and should be taxed as such.

This tax was created using polling data compiled from our population centers, not our agricultural areas. The economic data presented was geared toward indoor warehouses in the desert, and ignores the Board of Equalizations’ excise tax model under the Tax Guide for the Agricultural Industry based on actual volume of product produced and sold, rather than cultivation area, due to unforeseen yields, hardships and successes. While it was being considered, every meeting led to substantive changes with very little time for public input. As the process finalized, those who spoke were told by Supervisor Lovelace that they should have participated earlier. This is a slap in the face to Humboldt’s citizens, to have their public comments dismissed as too late during a process that was rushed to completion. Humboldt’s media outlets were not informed about the details of the rapid-fire changes to this tax, and at no point was there an attempt to reach out to the local organizations that have been driving compliance from the farmers’ side for input.

The timing of this measure impacts small farmers much more deeply than large, factory style farms. In the next 18 months, small and large farmers are burdened with the same fees, farm upgrades, and new operating expenses. Small cannabis farmers are currently less able to absorb these costs without the agricultural infrastructure afforded other small farms in Humboldt. One time costs can be amortized eventually and turned into (non-tax deductible) assets, but long term fixed costs based solely on canopy space leave our cottage farmers with limited options: scale up, sell out, or stay black market. This goes directly against the county’s goals for the future of Humboldt’s cannabis industry, goals lauded by the county, the farmers, and the public.

This measure does not fund social services as promised. Our supervisors listed many noble community programs that our cannabis farmers are eager to improve. In order to more easily pass the tax, though, those promises were not included in the law. Instead all excise tax collected through this program goes directly to the General Fund and can then be spent on any debt, previous voter mandated expense (like measure Z), or county agency. Many of the farmers who quietly supported the measure through its creation were surprised to discover these promises were never written into the measure. These were among the public comments dismissed by Supervisor Lovelace as too late in the process to be considered.

This measure does not curb non-compliant farms; it punishes compliant ones. This tax measure can only affect those farms who can afford to speed through their compliance applications in the next 6 months. Many cottage farmers are finding they will soon need expensive professional assistance in this process, and are having to work through it as farmers do: one harvest at a time. Adding a flat tax before they even have the opportunity to apply for a state license will decrease the rate of farms that can come into compliance and the rate at which they can do so. This slows the pace of addressing environmental impacts, and decreases the tax base that can pay into enforcing trespass, tribal, and public land operations.

If the county’s goals were to stem the environmental impacts of non-compliant farms, create a sustainable funding source for community projects, and protect a decentralized, local craft agricultural industry then this tax measure misses the mark. Cannabis industry professionals are eager to help meet these goals, and are asking for a more well researched measure based on the Board of Equalizations’ excise tax model under the Tax Guide for the Agricultural Industry. A tax that is so inflexible that it can’t be increased outside of a ballot year to maintain or upgrade our county’s services and agricultural infrastructure does not meet these goals. For these reasons, we must stand in respectful opposition to the measure as it has been proposed.

Sincerely,

Humboldt County Cannabis Chamber Board of Directors

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15 comments

  • I looked for the regulations put on small distillers of home-brewed whiskey when that particular Prohibition ended. I found (through the ATF agency) that Moonshiners cannot be in possession of more than 1 gallon of their finished product at a time. I could not find any additional restrictions.
    I’m looking for the regulations on small tobacco growers, as opposed to Big Tobacco, and although I’ve come up with nothing specific, a friend in Kentucky tells me that 5 acres of tobacco can be grown without additional regulation or taxation.
    These two examples point out the Federally recognized differences between “Mom and Pop” production and commercial production.
    It seems to me that 25 plants per parcel (within zoning regs) should be TAX FREE; and that this would afford M&P equal (tax) protection under the law while reinforcing the protection of our right to privacy. I know that 25 well done plants puts kids through college, and/or supplements one’s retirement plans. For me, that was the goal.
    Exempting 25 plants from all the hysterical BS about Cannabis could help restore the government’s sanity as well as encourage our own social return to Small is Beautiful.
    I’d really like to hear other opinions on this idea. Take care. Mendocino is watching you. af

    • Would you please explain exactly why you should not have to pay taxes on the income you generate on 25 or any other number of plants?

  • They actually have said this. if you look into it. They will allow caregive collectives of up to 5 patients each with there allowed humboldt county 10×10 growing area. So technically you can still stack up to 5 215’s on one property file for a non-profit caregiver collective and continue to provide medicine for resonable compensation as stated under the origional 215 law. This means you can grow 500 sq ft indoor or outdoor without joining the commercial system. But mostlikely you will still not be allowed to do this on residential < 5 acres.

    • Indoor vs Outdoor aside, wouldn’t the harvest of a specific number of plants be more beneficial for both the patient (especially Outdoor) and the Provider, too? I agree that residential areas will still prohibit the production, like back-yard live stock and other agricultural restrictions. af

      • The county determined that Sq ft was better than plant count because it can allow for more yeild and multiple crops a year.

  • PATIENT EXEMPTION Qualified patients are exempt from the state permit program if cultivating less than 100 square feet for personal medical use. Primary caregivers with five or fewer patients are allowed up to 500 square feet (AB 243, 11362.777(g) and SB 643, 19319). Exemption under this section does not prevent a local government from further restricting or banning the cultivation, provision, etc. of medical cannabis by individual patients or caregivers in accordance with its constitutional police powers under Section 7, Article XI of the CA Constitution (11362.777(g)).

    • It just seems better for the restrictions to relate to number of plants, not square footage or canopy figures. Wouldn’t that be simpler? af

      • Thomas Edrington

        Not really, since there’s so much variance as to how much a single plant can produce. Same goes for square footage. The guidelines for alcohol excise taxes in California are on product shipped out (or sold on site). This would have allowed the county to adjust rates based on projected yield and for small farms to continue to operate without having to scale up, sell out, or stay black market.

        Instead, the Supes let a consultant from the SoCal desert convince them to tax Humboldt like a desert indoor warehouse economy. There is no tax on any industry or commodity in California that’s done this way, for many very good reasons.

        When the Supes want to know how to tax dairy, they ask the local dairymen. When they want to know how to tax gas, they ask the local gas trade association. But when they’re trying to figure out how to tax cannabis, they hire a consultant with no experience gaming in Humboldt. Go figure.

  • I like Anon’s thinking….but who, pray tell, is the Humboldt County Cannabis Chamber?

  • veterans friend

    How can they tax the ground before anything is grown, harvested processed & sold. Ridiculous & probably illegal.

    • Honeydew Bridge Chump

      They own the ground and collect yearly rent in the form of property tax.
      Americans haven’t owned land for a very long time .
      If they want you out of your rental they have something called imminent domain to take any value you may have in your rental.

  • In a couple of years big ag will be growing weed , don’t think for a minute that anyone is gonna give a shit about your “boutique” weed. Let’s hope you stashed away your dough when all this was illegal, you’re gonna need it.

    • Honeydew Bridge Chump

      $20 lb just like bulk tobacco, and that’s retail.

      The time to sell was three years ago on property you don’t want to keep.
      Stuff you want, it’s going to be a quarter of the price now, with massive building restrictions.

      I can’t imagine taking on debt to grow…..black or sitting at the table with Steven Strawn or whatever Muppet is claiming authority.

      Truth and Rights….. they went out of fashion!

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