How Is Humboldt Going to Collect Taxes on Marijuana Farms?

Money and marijuana featureThe following piece is written by Daniel Mintz and appeared yesterday in the Anderson Valley Advertiser:

Humboldt County has set its state and federal lobbying priorities for the coming year and one of the top-ranking items identifies a significant obstacle to collecting marijuana grow taxes.

The county’s Board of Supervisors considered its state and federal legislative platform at its Dec. 6 meeting. The platform sets lobbying priorities to be advanced by the county’s legislative consulting firm.

Among the top state priorities are establishing local control of marijuana regulation as well as local control of marijuana taxation.

In November’s election, voters approved an excise tax for marijuana cultivation but the legislative platform states that “the transient nature of commercial cannabis cultivators presents significant challenges regarding approval and collection of such taxes.”

As described in the platform document, the problem is that cultivators could lease land, grow a crop on it and then leave the property, “Making it extremely difficult, if not impossible, for counties to collect taxes.”

The proposed legislative solution is to allow counties to collect grow taxes as part of property tax bills. But in response to a question from Supervisor Ryan Sundberg, County Counsel Jeffrey Blanck discussed the dilemma of taxing unpermitted growers.

He said state regulations stemming from voter approval of recreational marijuana may define unpermitted grows as being beyond taxation because they’re illegal. “We’re closely watching that to see when and whom we can send a bill to,” Blanck continued.

Blanck said he’s analyzing the issue and he described it as “a statewide issue” that all counties seeking to tax marijuana face.

Another section of the state legislative platform deals with regulating marijuana, describing it as a “particularly vexing and unusual land use.”

The platform seeks to allow counties to “enact prohibitions or general regulations in the face of threats to public health, safety and general welfare” posed by cultivation and dispensaries.

Also included is support for limiting grow sizes, as the platform describes the state’s allowance of grows of over an acre as a provision that “threatens our environment and local economy.”

On the federal side, the platform notes that the feds classify marijuana as a schedule one drug, which is defined as one that’s harmful and has no medical benefits. According to the platform, regulation of herbicide use and food safety and allowing marijuana-related banking can be done without forcing re-scheduling.

Providing the only public comment on the platform, Blue Lake resident Kent Sawatsky derisively referred to marijuana as “Humboldt County green crack” but supported rescheduling it as a means of advancing regulation and protecting the county from federal intervention.

“It’s imperative that this happens because the position you folks are in and the state of California is in due to a change of politics is what you would call an untenable position,” he said.

Supervisor Estelle Fennell asked if the section stating that the county believes regulatory issues can be addressed without rescheduling should be changed or added to.

Board Chair Mark Lovelace said the language was chosen because it’s unlikely that the federal classification of marijuana will be changed soon. “But there might be agreement that we should tax and we should regulate,” he continued.

Fennell suggested adding language indicating the county’s support for rescheduling.

Supervisors directed staff to make modifications to the platform and have it return for approval on the consent agenda of next week’s meeting.

Other priorities for federal-level lobbying include limiting corporate and union contributions in elections, stopping “wrongful postal closures,” reauthorization of several pools of federal funding and supporting Klamath River Basin restoration.

Other state-level priorities include allowing standard-sized trucks through Richardson Grove, allowing counties to implement their own versions of a state program that streamlines permitting for affordable housing and reducing voter approval thresholds for local ballot measures.

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54 comments

  • “I get home before daylight, just might get some sleep tonight…”

  • “Last fair deal in the country Sweet Suzie. Last fair deal in the town”

  • We’ll have 10,000 grows in the Emerald Triangle and collect $1,000/year in taxes. Wahoo!

    • The 3000 farms that signed up for the county compliance are going to pay. If you are applying for one acre, which is the largest, it would be $43,560 a year just for that tax. This does not include income taxes or employee taxes. Considering the product is going for $800-1200 a pound it seems to be encouraging them to go as big as possible to be able to pay the taxes. They should be assessing huge fines on the illegal grows property owners.

      • Friend of the Devil

        …and they most certainly will. The only way they will control illegal grows is through fear. Full property and asset forfeiture will become very commonplace once again… and ironically, it will be heavily funded by compliant growers paying their taxes. Welcome back to the ’80s! There’s gonna be a massive bloodletting when things get rolling.

  • Just another example of why “regulation” might be a bad thing, so you lease land, the lessee pulls a grow and leaves, now you the property owner is dinged on your land taxes, which if unpaid leads to losing your property, cute!

  • No! Bad County! No treat!

  • leave it to the bureaucrats to drive us out of business with over taxation

  • Honeydew Bridge Chump

    It would be so much easier to send a fully equipped Marine division and put an end to this nonsense once and for all.

    Marijuana is illegal and immoral.

    Anyone supporting marijuana growing should be brought up on terrorism and murder charges.

    • What a great neighbor you would make. Probably shoot a dog for shitting on your lawn.

    • You should run for County Supervisor!

    • And you would make such a great leader. I think you should approach the Sheriff’s Dept. with your ideas.

    • Too bad the penalties for child molesting werent more severe. Dont know how u feel about that.

    • You are [edit]so uneducated. If you were educated you would know that they already tried to control marijuana growing with the Marines (it was called CAMP in California,[edit]) and something else known as “prohibition” which mainly targeted minorities. Both CAMP (the Marines) and prohibition massively FAILED. Go back to school and pay attention this time,[edit].

  • How bout looking at how WA & CO taxed it. Simple enough or maybe not.

  • Alcohol,tobacco,guns,now Marijuana.The government wants everything,and give you nothing.tax tax tax everything is taxed to death

    • G-MAS…you don’t really understand how anything works, do you? Policing grows and druggies is HUGELY expensive for law enforcement and the war on drugs is a failure.
      I grew up in SoHum and can’t believe how shabby it is now. It’s only right that people making a shit-ton of money growing should pay taxes to support infrastructure like roads, water, etc.

      • Well I sure do.and what do you mean I really don’t understand how anything works.do you think I’ve never paid taxes,wrong,do you think I’ve never grown weed,wrong.simply put,the government makes way to God damn much money off us.

        • ‘Taxes are the price we pay for civilization’
          I like nice roads and good schools and police too when they are doing what they are supposed to do. If you like what so-hum is turning into over the past ten years then maybe taxes aren’t for you.

    • Are you s****ing me I pay more taxes than any marijuana grower out there this is b******t they need to pay the taxes

  • Don’t worry! Trump will name a warrior to head the DEA. They will come straight here to knock down all the biggest grows under federal RICO law. County permits won’t matter! I will laugh to see the greedy ballers get their due. All this will be set back for a few years. Prices will rise or stabilize and the small people will get a few more years from destruction by the selfish mega-growers. It will be great!! And funny!!!

    • Honeydew Bridge Chump

      I hope so!

      A Marine division with attack helicopters would be able to end this madness in a couple weeks.

      These weed growing terrorists need to be pulled from their rat holes and brought to justice, every single one of them.

      The terrorist issue is so large that only The Marines can bring victory and terrorist weed growers to justice.

      It’s insane how these terrorist groupings have been allowed to operate and spread destruction, murder, and lay waste to the land.

      Every single one of them deserves a life sentence of forced labor and absolutely no communication with the world outside their labor camp.

      • I used to assume that this commenter has tongue firmly lodged in cheek.

        Now I wonder whether the President-elect is branching out from his Twitter account.

  • Hopefully legalization will put a stop to much of the welfare fraud going on in humboldt. Many growers plead low income and pick up social services like medi cal , c.a.r.e , wic , head start , cal fresh even though they make a substantial undeclared income. I look forward to them finally contributing to the economy instead of taking from society.

  • Due to the potential loss of significant amounts of money from the tax payers, all counties will now pass law that all pot must be grown within the confines of a maximum security prison. All gardens not within these confines will be treated as threats to our nation. Growers will be incarcerated for tax evasion, treason, & spreading the virus aka constitution. They will be sentenced to life without parole & will work in the penitentiary gardens for the common good.

  • Humboldt’s local marijuana crop tax, Measure S, was poorly conceived, badly written, and is going to lead to a great deal of work for the assessor, not to mention probable litigation, because it is almost impossible to implement without physical assessment of the cultivation. For those who don’t read tax measures for pleasure, let me briefly say that Measure S taxes the “cultivation area” of cannabis farms on the basis of the number of square feet that area contains. It might have been a tax on plants, or more fairly, a tax on the end product, but it isn’t. Only Supervisor Sundberg seems to understand that crops fail, law enforcement is not well informed about what is legal and does destroy legal gardens, and that due to gardener skill variation not every square foot yields the same income. That aside, the “cultivation area” definition is a boon to lawyers, and the large amounts of money the tax requires to be paid seems to insure that there will be litigation over it. The issue comes to this: do you have to pay the tax on a square foot which does not have a plant on it? The county will say yes. The farmers will say no. The law doesn’t clearly define the answer. Worse yet, even if there were a universally agreed obvious way to compute the number of square feet subject to the tax, there is no way other than physical inspection to determine how many such feet there are in use on a farm. How are we to avoid sending inspectors out with tape measures to thousands of farms? Two ideas: self-reporting, which has some obvious drawbacks, and permit size, which is almost certainly the basis the first tax bills will use. But there’s a difference between having a permit to fish, and fishing. Likewise a permit for 20,000 square feet doesn’t mean the farmer is growing 20,000 square feet of cannabis. Perhaps, realizing that you can grow less than your permit, but you can not ever increase the permitted area’s size, the farmer incorporated some future dreams in the permit size requested, and is only growing 10,000 square feet this year. That farmer is not going to be paying for the 10,000 square feet permitted but not used. Some people are getting permits they don’t intend to use at all, as a means of increasing the value of their land. They are not going to pay the tax bills, either. To sum up: an unfair tax on an ill-defined basis, which requires individualized physical site examination to substantiate, is likely to cause the county some unforeseen headaches. “Measure twice, cut once” is the carpenter’s rule. For tax bill writers it might be “Revise often, put on the ballot once.”

    • Bottom line is:
      How will they pay when pot loses 80 percent of its value the next two years.
      Supply is too high,demand too low.
      And the supply chain hasnt even hit the market yet.

    • Thank you for the detail ed ,

      Mixing any federally backed loans on property’s and licensing of schedule one drug manufacturing on said property is illegal and a logical federal enforcement tool . the county will enhance endanger its “licensees ” if they continue to mix the two .bad bad bad.

    • Ed
      Serious question here. How would you regulate and tax it? Did the regulators ask you for any advice? They should have.

      Obama ‘says’ that the feds won’t bother any grower that will comply with local laws, yet that is nowhere in writing. It will be “legal” in California and Humboldt county, but the feds still hold the big hammer. I’m not a grower, but the grower economy certainly impacts me and the local area. Do we have to create our own currency to make this all work? Banks won’t touch a marijuana economy because they fear being charged with money laundering, or participating in a felony.

      It still seems like Tom Allman had the right approach with his zip-tie program. No zip tie, no permit! Buy as many as your land can be certified to use, or as many as you can reasonable grow. Limit the amount of zip ties that can be used in each growing area, regulated by the county, taking into consideration water, land suitability and so forth. Then subject the grower to spot inspections to make sure that they are complying. That should be easy, because it does take a while to harvest a crop. Any crop failures would have to be inspected and the grower could be credited with new zip ties. As the crops were sold they would have to turn in their old zip ties with a yield report, similar to fish and game tags.

      I fully realize that I’m out of my league here, but it I’m not the only one. It seems that some in charge of this whole fiasco are also out of their leagues.
      Thanks Ed
      Ernie

      • Honeydew Bridge Chump

        Wouldn’t the growers just claim someone stole the plants and get their zip money back?

        Growers murder,lie, cheat, and steal and pride themselves on it, so why would they comply with that?

      • If anyone is familiar with how the building dept sometimes works, they ask for an inspection, if refused they usually easily get an inspection warrant then served with police, then there is back and forth usually including threats of so much per day fine and penalty. It sucks, they win.

        That process would work with MJ product assessment taxes on mj grows, tho a lot of effort.

        A property owner will/must realize that they can lien his property like a tax lien. These taxes can occur from a tenant grower or trespass grower..the county is not to be tangled by claims of ‘I didn’t know’ (and f*k that bullshit)…much like a property owner can be fined when there are too many police calls to a place, that can and does happen.

        Alternatively the assessor could offer two choices:
        1. aerial mapping showing growing and a rough idea of the size produces an estimate of the product to be taxed>>>Pay this amount at some discounted rate, no inspection charges.
        or
        2. you can challenge that but that challenge allows on site inspections and photos and measurements at some more accurate but higher rate, plus inspection fees as well.
        Or
        3. you could have the product inspected on site and stamped and pay the lowest rate. no inspections, just there it is and done. Any fudging this cheaper option is then gone.

        Either way the property owner is notified and the tax liens are on him to fight it out and collect or be screwed by his tenant..or his (‘I didn’t know!’) trespassers.
        Property owners have seemed to skate liability around here…this way they are instead involved and it is in their interest to be involved. Manage your property or it will cost you.

        Another alternative is that on site inspections w/warrant searches, measurement/assessments are carried out by the same private security people the timber company uses, somehow deputized, their time charged to the grower who is resistant to comply. Liens placed on property for the county assessment under this duress/resistance.

        To sum up:
        * the easy way, by maps, pay here. cheapest.
        * on site inspection assessments: pay here plus smaller time charges.
        or
        * the hard way, with armed inspections and warrants pay the high rate plus high paid time to the county/private security inspectors/court costs.

        And unpaid MJ taxes become property tax liens, enforced.

        People will f*g hate that.

        It is not perfect, product, harvests will be missed (tho still the taxes need to be paid and there would be penalties for untaxed MJ presumably it could be a privately contracted job as well because of the huge burden it is on the assessor department.

        Since EIRs are probably done as an occupation, thanks trump, , those people need the work and are used to exactly this type of assessment.

        This would pressure more black market moonshiners indoors, booo.

        (sry, too much late afternoon coffee)

  • Environmental Monopoly =
    Where u can only do a certain business in a certain area which in turn controls competition and pricing.
    What the triangle used to be.
    Do the math b4 its too late…

  • they work for us.

    humboldt county supervisors can stuff their “tax”. theyre government criminals, heres why:

    first, taxation without representation also applies to the presence of an actual commodity in the first place, yet we paid our supervisors to decide its our better interest to pay them tax money not only before we collect taxable dollars, but before we even have anything to sell.

    second, if arguably the money is for cultivation, then the incremental price of a dollar per square foot is absurd. thats an extortionary rate, period. thats our supervisors “protection money”, and at least two of the five have in no uncertain terms said so. i could argue it crosses the zoning law line in the process. nobodys talking about agriculture.

    third, forth and so on, marijuana is very illegal on a federal level, its a dick slap to everybodys face to encourage federal consequences while taking a cut risk-free.

    humboldt countys board of supervisors is developer owned and operated. they do not represent a sustainable, localized economy. whereas they could be civil servants, they opt instead to brainstorm ways to squeeze more nickels out of us every year, on our dime.

    the “tax” is going to hurt the big picture way more than help it.

  • How on earth is the county going to shut down all the illegal non registered grows is where we should start with questions. The upstanding ones that came fourth to register were assured that their permit money would be used to eradicate the other illegal operations, but it sure doesn’t look like it at all.
    Now that folks want to go legal and file their permits they get taxed even harder while other growers aren’t even thinking about compliance and still are expanding their operations which isn’t helping bring the prices up whatsoever.
    Lets start by a dressing this topic first and
    get the shady out of this county, its time!

    • they work for us.

      yes…recognize that the people who are now demanding money from federally illicit narcotic sales are the shady. people gonna grow weed forever, its natural. the county could recognize compliance as compliance, every business is already taxed accordingly. instead they treat marijuana like its still illegal. instead they demand a huge share of the business altogether, to sit on their asses and “allow” us to grow plants.

    • Yes. The mega-growers who blew it up big through 5 years of epic drought with no concern for our fish and creeks were in a great position to spend huge money on getting engineers and consultants and permits for …huge grows. They spend money on permits knowing full well that much of that money will be used to eradicate the many smaller growers who did not have enough money to get permits because they weren’t greedy assholes. Now…how am I supposed to have compassion for the mega-greedy selfish asshole sell-out manipulative motherfuckers that the government calls “wonderful” and “stepping into the light”? Because right now I have zero!

      • Well said. I don’t care so much about the “greed”, just the hypocrisy.

      • I suppose you didn’t get a business degree from an ivy league school. It’s called, use and abuse the pay to play system with incredible precision and accuracy. We are always looking at the result of people who get their head start much before the rest of us. Too many examples to list, but the systems are rigged, and if you are lucky enough to benefit from anyone of said systems, it’s because you are servin a purpose.

  • Medical tax holiday

    This blunder on new California marijuana law could cost state millions

    The voter-approved Proposition 64 had addressed taxes for recreational and medical marijuana, but the omission of a date in proposed law has eliminated the tax on medical marijuana from now through the end of 2017

    http://www.thecannabist.co/2016/11/16/california-medical-marijuana-tax-proposition-64-omission/67735/

    “Board of Equalization chair Fiona Ma recently noted that about two-thirds of dispensaries have not been fully compliant with sales tax requirements up to now.”

  • Missemeraldtriangle

    Does anyone know why the county took measure S off of their website? I can’t access it ? Is there anywhere I can access it

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