Voting Yes on the Humboldt County Cannabis Excise Tax Will Be ‘Cultivating County Prosperity’, According to Proponents
Several proponents recently approached us to give their reasons for backing the tax. Patrick Murphy of California Cannabis Voice Humboldt and Emerald Family Farms summed up the basic pro cannabis tax argument by saying that the tax will improve the quality of life for all residents of Humboldt County. “The tax will provide the funds necessary for cultivating county prosperity,” he argued during a conference call yesterday.
Natalynne DeLapp, the Executive Director at the Environmental Protection Information Center (EPIC) agreed with him. “The rising tide floats all ships,” she said. Right now she argues, Humboldt County government is chronically short on money. “If we do not bring money into the county, there will be ten, twenty, to thirty million dollar shortfalls.” This, she argues, will force cuts in mental health services, law enforcement, fire departments, etc. The Cannabis Excise Tax, she said, will collect money from marijuana growers that can be used to improve the lives of everyone.
The language of the proposed tax is fairly simple. You can read it in a minute. Eureka law firm, Janssen and Malloy, posted it on their blog site. We’ve shared it below:
Humboldt County Commercial Marijuana Cultivation Measure. To maintain and improve essential services, including public safety, job creation; crime investigation/prosecution; environmental cleanup/restoration; children/family mental health; drug rehabilitation; other County services, shall Humboldt County establish a $1 – $3 per square foot, based upon type of grow, annual commercial marijuana cultivation tax generating approximately $7.3 million annually until ended by voters, with all revenue for the County, none for the State, annual audits, and public review?
One of the concerns that Humboldt County’s Cannabis Chamber of Commerce (HCCCC) brought up in their earlier press release is that though the measure calls for the money gathered to go to drug rehabilitation, environmental cleanup, mental health services, etc. the current way the measure is structured means that the money can’t actually be targeted to certain problems. It must go into the general fund.
Isaiah O’Donnell, President and co-owner of Northern Empire Organics and an executive board member of Humboldt Cannabis Business Alliance argues that while this isn’t ideal, it is necessary. He pointed out that the way our county works is that the tax can be passed in only one of two ways. One way, he said, requires that “you get 66% of the vote and only then you can dictate where the money is spent.” The other way requires only a simple majority of voters but then the money raised must go to the General Fund.
O’Donnell said he believes that the Supervisors will make sure the money is spent in ways that are most needed. “We feel like our Supervisors are working with the cannabis industry,” he explained. “…[W]ith the correct amount of lobbying, we can get them to spend where it needs to be spent….We can create a boom cannabis economy.”
HCCCC’s press release worried that small farmers would be hurt by imposing a tax as they struggle to come from the black market into the legal world of permits and fees. Patrick Murphy, even though he is pro the Cannabis Excise Tax, said, “I believe that craft mom and pop farmers should be exempt or have a really reduced rate.” Yet, he pointed out, “We see that an excise tax is popping up in every single county…and some are very alarming. $1 per square foot is very fair….. It doesn’t get any lower.”
Hezekiah Allen, executive director of the California Growers Association, stated, “It is a reasonable rate and reasonable tax program. Humboldt County has done a great job. It is a great public policy in action…Larger commercial growers will be paying their fair share.”
A sampling of counties around the state shows the proposed Humboldt tax is on the low end. Yolo and Calaveras counties are about double Humboldt’s rate. Sacramento Bee states, “Calaveras County voters are expected to vote on a marijuana tax in November that would impose a $2-per-square-foot annual levy on outdoor commercial gardens – the vast majority of the county’s cultivation – and a $5-per-square-foot fee on indoor grows.”
But other areas have even higher proposed taxes. According to a Cal Norml article which worries that high taxes could “kill California’s golden ganja goose,” some of the proposed fees are 25 times as much. The writer states,
Cathedral City, which is proposing charging $25/sq. ft. cultivated, plus $1 for every gram of cannabis concentrate and every unit of cannabis-infused product; and Coalinga, which is set to enact a $25 per square foot tax for the first 3,000 square feet, and $10 per square foot thereafter. Monterey County, which just voted to put a measure taxing farms at $15/square foot, and automatically raising that rate to $20 in 2020 and $25 in 2021. In addition, the Monterey proposal would tax nurseries at $2-$5 per square foot, and gross receipts at $5-10%.
Even though the tax is lower than in other areas, Murphy believes, the money brought in can help the area. “Humboldt County is a great place to live,” he said, “but we think we can do better.”
Recently he stopped in Napa County. “Quality of life is high there,” he said. He thinks with the Cannabis tax, Humboldt’s quality of life would also improve. “There are some problems up here that can only be solved by funding,” he argued. “Within 5 to 10 years [of the cannabis tax being implemented], we could reach comparability with Napa.”
“I think together we could enact lots of ideas that came from lots of different sectors,” Murphy said. “I think our crime rates will go down. We could have treatment for drug addicts. Make an investment in infrastructure.”
HCCC’s press release pointed out that the law as written doesn’t account for bad years that might cause crop failure. They argue that a tax should be “based on actual volume of product produced and sold, rather than cultivation area, due to unforeseen yields, hardships and successes.”
Essentially, the pro supporters respond that the tax is low enough, as O’Donnell said, that “even having a really bad run,” a farmer should be able to afford the cost. O’Donnell argues, “We have the lowest funded schools in the state. We need to fund infrastructure.” He states that even though growers have contributed to the community through donations, “It is time for growers to pay taxes like every other business.”