Attorney Charges That Humboldt County Tax on Cannabis Is Illegal

Cannabis taxesLocal attorney Ed Denson has written to Humboldt County to recommend the County not collect any Commercial Cannabis Cultivation Taxes because they are being implemented illegally. Denson says the County must revert to the language of Measure S and reassess permitted cultivators’ tax bills.

Many Humboldt County Cannabis farmers are concerned about being charged taxes for the time they weren’t yet cultivating. Some also feel they were “tricked,” as one put it, into submitting their interim permit application by December 31, which makes them liable for taxes in 2017.  Those who waited until January 1 to submit the paperwork didn’t have to pay 2017 taxes which can top $30,000.

According to Denson, the County made alterations to Measure S in June of last year, that changed who is taxed, increased how much they are taxed, and increased the length of time they are taxed. Those kinds of changes violate State law and the California Constitution unless they have voter approval.

Measure S contains a section based on Proposition 218 which is the state law that prohibits any increase in taxes without a vote by the people it affects, says Denson. Section 719-9 reads in part “Humboldt County Board of Supervisors (BOS) may repeal this Chapter, or amend it in a manner which does not result in an increase in the amount of the tax or broaden the scope of the tax imposed herein, without further voter approval.” (Emphasis added)

Measure S became County Code as Ordinance 2567 in December of 2016, but in June of 2017 the Board made changes to that Ordinance and renumbered it to 2575 without putting it back in front of the voters for a new vote.

Denson wrote to the Humboldt County Board of Supervisors (BOS) on January 8th (see full text here) that in his legal opinion this is an insurmountable problem because he said, “Some changes resulted in an improper increase in the amount of tax, and an improper broadening of the scope of the tax….Moreover, the alterations to what is taxed, and who must pay the tax, have effectively created a new tax in place of the Measure S tax approved by the voters.“

His letter details his entire argument, but, in short, he says voters approved a tax on the actual area being cultivated at a given time, however, Ordinance 2575 taxes the entire permissible growing area whether it is all being used or not.

And, Denson writes that Ordinance 2575 adds new language not seen in Measure S. This states the tax occurs “regardless of whether or not marijuana is actually grown on such property.”

Denson contends in the letter to the Board of Supervisors “[T]hese changes…broaden the scope of the tax from …the actual cultivation area to…the permitted area whether cultivated or not….These alterations of the ordinance also increase the amount of the tax by taxing land not used for cultivation….”

Denson’s second concern addresses the length of time the tax is applied. Denson’s letter quotes Measure S as saying that “taxes shall begin to accrue on the date on which a person becomes engaged in legally authorized … cultivation.”

Ordinance 2575 changes this to “taxes shall be owed for each and every year in which a commercial marijuana permit is issued.”

Denson writes, “This replacement increases the amount of the tax considerably….”

Denson’s letter says the language changes the meaning of the rule from taxing the act of cultivating to taxing the cultivation permit itself. And, he says, it changes the law from taxing for the time period the land is actively cultivated to “an annual tax independent of the actual cultivation period.”

And Denson’s third challenge is that the BOS changed the definition of who must pay the tax from a permitted cultivator, who might be a lease-holder or tenant, to the landowner solely. The language in Measure S imposed the tax on “each person engaged in legally authorized commercial marijuana cultivation….” whereas Ordinance 2575 says “each property owner whose property is subject to a commercial marijuana cultivation permit shall pay….”

Denson concludes that “[t]he changes Ordinance 2575 made in Measure S are so fundamental and extensive that they amount to a new and different tax replacing the tax that the voters approved.” He writes, “Neither taxing property owners, nor using the size of the maximum space of cultivation permit as a basis for tax, has been presented to the voters for their approval.”

Denson suggests the changes to Measure S were made because it was “more difficult to put into effect that you realized. But you can’t just change what the voters passed because you have determined now that you should have written Measure S differently. The proper way…is to repeal Measure S and replace it with a Measure you feel solves the problems.”

County Council Jefferey Blanck was interviewed by Nicole Norris of KMUD News on January 17. (Listen to the entire interview here.) Norris asks Blanck to respond to Denson’s arguments. Blanck explained, “This is a tax on the right to do business.”

He compared the cultivation assessment to a business license, and then said,

Once you have the permit, you have the right to grow marijuana. Whether you do or not, doesn’t matter. You’ll still pay for the permit and you’ll still be taxed on what the permit says. We feel all of what we did is consistent with what the voters approved, with what the Planning Department did and with what they are telling property owners as well as the applicants because a permit runs with the land, not with the individual.

With regard to Denson’s contention that Measure S allows for taxation to be pro-rated based on the time cultivation is actually happening, Ford said “There’s no pro-ration. You pay the taxes for that year. It’s all up front. The second Ordinance [2575] did clarify how we are going to do it….hopefully, it was to explain it to them. The initiative had nothing about pro-ration.”

In his letter, Denson writes that when Ordinance 2575 increased the period of the tax from the actual time marijuana is cultivated to the entire calendar year, it changed Measure S from a tax on cultivation to a tax on cultivation permits.

When County Council Jefferey Blanck explained the reasoning behind simply taxing the calendar year, he said, “If you want a year off, don’t apply for a permit. But we don’t want to be running up there in the field wondering ‘did he grow in these 3 months or he didn’t grow?’ No, we give you the permit, you pay the tax and it’s up to you.”

Blanck added, “One thing we looked at was if you take two identical parcels, one with a cannabis permit and one without, the one with a permit sells for much more, so saying that there is a value to having a permit on the property big time. And that was also shown by the value of Prime Ag Land almost quadrupling after Measure S.”

In the meantime, cultivators who submitted their final notarized request for a County Cultivation Permit between October of 2017 and the end of December have been receiving their tax bills for 2017 since Denson wrote that letter. The assessment is $1.00 {to $3.00} per square foot of potential cultivation area {based on method of cultivation}. So for a 10,000 square foot grow, that is a $10,000 {to $30,000} assessment on a growing year that already ended. Many of these cultivators report feeling misled by the Planning Department.

The cover letter from the Planning Department for the County Cultivation Permit tells them they must do a list of tasks and then recommends they get the Permit signed, notarized, and submitted before the end of the 2017 business year to stay current with the process of applying for the much-needed State Permit.

But by complying with that suggestion, they then owed the 2017 Cultivation Tax for the entire year and the entire permissible cultivation area.

County Council Blanck confirms this. He said, “So, you’re right, if you get [your permit] December 30th you’re going to get a tax bill in a couple of weeks. That can influence someone to say “don’t want my permit then;’ before a permit is issued they can say ‘Stop the process; I’m not doing this,’ but once it’s issued, it’s issued. Part of the reason people wanted permits early is to be in the front of the line to get the state licenses.”

When asked if there would be leniency in this first year, Blanck said they had talked about it and decided there would be none. “We’ve had discussions about this,” he explained. “No, we are going to be fairly rigid. The tax doesn’t have language that says it will be pro-rated. It simply saying its triggered by you getting the permit in that year. “

Later, Blanck continues, “One thing we did really well was notify people. There was a big push for people. They wanted their permits so they could be first in line for the state permit. They didn’t care about being taxed for a small period in 2017. They might have changed their mind, but that doesn’t change our policy. “

When asked about the collapse of the cannabis economy, Blanck said, “I think the issue is you have an industry that was totally unregulated and they are coming in for the regulations….Now they are finding out what that means. Obviously, they aren’t going to make as much money as when the government stayed out of their business entirely. So the collapse is, if you have to pay tax on it and you’re doing a legitimate business, you are right you are not going to make as much as you did the year before. Potentially. Because your costs went up.”

He then continued, “What’s the price of marijuana doing? I don’t know… But I have no idea how that plays out one way or another.”

Regarding the financial pressures Humboldt County cultivators may be feeling, Blanck said,

For the existing grows, we looked at it and said ‘you’ve been doing this for years, so now you want to keep doing it, but then you are telling us we are going to put you out of business. That’s a little of putting the cart before the horse. You’ve already been in business and paying nothing. So there’s gong to be a balancing out…So when they are saying the County is driving them out of business for making them comply, they should have always had to comply with Fish and Game, with water rights, with all these things….Will this mean we go from fifteen thousand grows down to five or up to twenty? I don’t know. What we are trying is to get people into compliance to protect the environment. That’s the primary concern coming from the County.

Blanck explained the change in who is responsible for the tax from the cultivator to the landowner by saying that permits go with land not with individuals and by saying, “The permit requires a signature by the landowner as an affidavit that they know and understand what is going on on their property.” He explained that the County is now sure the landowner knows their land “is being used for cannabis cultivation purposes” and that this tax is “just a business risk they are looking at now.”

Amid all this, the cultivators feel they have paid the costs of regulation that gradually crept up on other industries over decades in just a year or two. Chip Tittmann is a long time Southern Humboldt resident, licensed general contractor, and president of a non-profit who has worked the last couple of years to come “out from under the Madrone trees” he used to grow under to hide from the helicopter surveillance.

Tittmann thinks Humboldt County is approaching the problem of illegal grows backward. Tittmann explained, “The government creates incentives for other industries.” In the cannabis industry, he observes, the cost is not hitting the Black Market growers, but is being visited upon those trying to come out from under the trees. He said if the County made it reasonable and inexpensive to get a permit, then the pressure would be easy to apply to the few who remained outside the permit process.

Toward that, attorney Ed Denson described a couple who consulted with him in October. They are residents of Mendocino County. They saw him for under an hour with their two-page form. After he reviewed it, they submitted it with a fee and received an embossed permit {document for their state permit application} by the end of the year. And in Mendocino County, the tax is assessed very differently. After cultivators pay their State tax, they will owe Mendocino County 2.5% on their gross receipts. In other words, $25.00 on every thousand after the state taxes are paid but before expenses are deducted.

Chip Tittmann says the community is currently being manipulated. He acknowledges that he and his Back to the Land generation mostly went underground to avoid government interaction as a response to powerlessness over the government’s war in Vietnam, assassination of world leaders, and general interference with individual liberty. But he said, “The Back to the Land people may need to be realistic about re-engagment in their citizenry, making a popular uprising” to get their needs met in the economy.

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126 comments

  • The bottom feeders have arrived

    • Tax them out of business!!!

      • The Real Ganjapreneur

        Funny you say that. Everyone in this county has benefitted from the cultivation of marijuana, whether you are for or against it. Humboldt County has been bullet proof through all the recent recessions we went through because there was always an influx of cash, regardless of what was happening in the rest of the country. The trucks are always being sold, brand spankin new and shiny, houses and land were always being bought. Cannabis money was flowing into legal businesses as cannabis growers bought their products. Yeah tax us out of business! You are so short sighted you don’t realize the indirect benefits businesses have reaped as a result of the cannabis industry. Tax us out business! Guess what? There goes your business too!

  • Once again, the Humboldt County Board of Supervisors and their hand-picked Planning Commission screwed-up a fairly simple concept.
    Rewriting Measure S to suit their own greedy needs is a clear violation of the law, no matter what the county counsel spews.
    The BOS needs to fix this disaster.

  • According to the Board of Supervisors’ website they are not meeting Tuesday the 30th of Jan. That puts their next meeting on the first Tuesday of Feburary (6 Feb 2018). I believe the new cannabis permitting ordinance will be presented to the Board on that date, but check the agenda if that’s of interest to you.

    • Hi Ed Hope your felling better

      • I am feeling better, or at least, no worse. Thanks for asking. I seem to have stabilized with some coughing and occasional runny nose. Theraflu stage, in other words. I have always enjoyed Theraflu.

        This story is getting more attention now that Kym has published it. I have some hopes of getting the board to do right without having to go to court. But I would like to hear from people who have already been damaged by these changes, or who potentially will be when they get their permit and tax bill. I am especially interested in 3 catagories of people
        1. People who applied for a permit but did not grow on the land (because the tax is being charged on the size of the permit even if no cultivation took place)
        2. People who applied for a permit but did not grow as much as the permit allows (the tax is being charged for the full permit size)
        3. Property owners who did not grow, but who have tenants who applied for permits on their land. (Property owners are now liable for paying the tax)

        I hope to get people to go tell the Board what has happened to them, and awaken their consciences. If that fails, then perhaps we’ll have to seek legal redress.

        I don’t know if Kym allows people to put their contact info in a comment, so
        you can find my contact information on the “full text” link in the article, if you do not already know me.

        • Anyone can put their contact information in the comments.

          • Thanks for letting me know, Kym.

            ED Denson
            POB 158
            Alderpoint, Ca 95511

            707-923-4764

            edenson@asis.com (but asis is down at the moment)

            Text: 498-2600

          • Hi Kym, my name is Janet & I live in Harris.My husband & I have received a tax bill for the entire sqaurefootage we requested on our permit. It clearly stated on our map that we proposed to build an outside garden (for 2018) totaling 1131 sq.ft. we have been taxed for 2017 1313 sq.ft. outdoor. ? And my hugest concern is this 25% late fee. I certainly have barely been able to sell anything at all in the first month, it’s been difficult to pay trimmers, feed ourselves, & keep our bills from defaulting. I have never heard of any other tax, or any other type of business, or farmer that is penalized or taxed this way !

        • Ed, Do you know if someone who has applied for a permit and doesn’t want to pursue the license and is willing to stop growing cannabis, will they still get a tax bill? Is there a way to opt out?

          Thank You

          • The tax bills are going to people who have a permit. If you do not already have a permit, or an Interim permit, you can tell the Planning Dept that you are withdrawing the application. Just to be sure the message gets into your file, send them a certified letter, signature required. You will not get a refund on your application fee, but you will also not get a permit or a tax bill.

            Humboldt County Planning Department
            3015 H St
            Eureka, Ca 95501 is the address in my phone.

  • Pingback: Attorney Charges That Humboldt County Tax on Cannabis Is Illegal – Redheaded Blackbelt - Canna.Link

  • As someone who cultivated in 2017 and just had to pay the hefty permit fee of $7500 I find this tax to be very troubling. I never had enough money to fully plant the entire 2500 sqft and instead only had enough clones and money to run one of my light dep greenhouses. The other I left as full season, I applied for the full 2500 sqft in light dep and was taxed 5000 $ for 2500 sq/ft that I never fully cultivated. I asked the county about this and they said well that your fault, if you still want to grandfather in the whole sq/ft you should pay the tax. I went ahead and turned in my intern permit application before the end of the year. This I am finding out was a mistake and apparently, had I waited a week or so I would not be on the hook for 2017 tax’s. I am just reading over Ed Densons posts about how Mendocino has a tax of 2.5% on profit. This makes a lot more sense and protects the smaller farmers. Some people have horrible years, yeast, mold, bad genetics, mites, weather, rain, bad employees, etc. And with the tough testing many farmers will find out large amounts of there crop are worthless.
    I feel like the entire process of getting the permit has been stacked against existing cultivators, they treat you as if you are a criminal and a lowlife just for asking simple questions or getting documents related to your property. The private contractors are just screwing over un knowledgeable growers and taking advantage of them sometimes doing paperwork as simple as high school homework and charging people 500$ or 1000’s more!
    There has been a feud going on between the haves and the have nots and i feel now that regulations are here they have nots are using it as payback to go after the people who made money on the marijuana boom!
    In the end people need to realize all the folks who got permits are getting treated like crap. People involved in the black market will still continue to do as they wish. Humboldt politicians just look for new way to reward there friends and take out there aggression they have for the black market on the newly permitted legal market.

    • No shit bro , welcome to the real world of taxes and regulations. Not for the faint of heart .

      • Humboldt Crooks At It Again

        How about the supervisor that lives in an unpermitted house on land that was illegally subdivided

      • Would you types quit the tough talk, folks like myself have been operating legal caregiver coops that have been paying taxes for years, and have been helping lots of patients in CA. We have paid income tax, sales tax, etc etc. don’t assume everyone is some full blown criminal with your i know it all attitude.

        • groba dude osnt trustafarian

          Well, now, you WERE a criminal in several ways, and now, well, are you not breaking laws?

          Pot growers are actually becoming whine-makers, and it’s really boring!

          Like they say in Goobsterdam, if you don’t like it, leave!

          Grow your shit, pay your taxes! No one is forcing you!

          If you can’t figure out the business, maybe you should quit smoking that dope!

          Great pot sells for over $6400/lb in a dispensary.

          I think growers are on the wrong end of this business.

          The number one thing you can say about farmers is, they are always complaining!

          Welcome to reality, bitches.

          • Oh, I’m sorry! You must have thought this was lost coast outpost where trolls and obnoxious foul mouths are a dime a dozen. You can find your clan by heading on back to that direction … thanks and have a great day!

    • Amen ! It’s rough out there

    • Question:

      If you were short on money, what was the reason you chose to run a light dep?

      Full term is absolutely cheaper and absolutely returns more.

      I see your type of decision making a lot and I really want to understand what the angle is.

      • Light dep means a return on investment fairly quickly as the market demand is higher in mid summer. Long season price drops significantly, markets flooded and you may be stuck with a bunch of plant products that places like banks, and county tax board won’t accept as payment. Then your forced to sell your product at cost just to stay out of foreclosure or in the case of county taxes incur penalties thus driving the price down further. The problem is most growers have been foolishly loose spending with their relatively minimal gains which has created the idea that all growers have been making “millions for years”, and could easily afford the cost of regulation. In reality most growers like farmers live harvest to harvest and one bad season can be devastating, be it rain, pests or law enforcement/ thieves your more likely to be unsuccessful than succeed.

        So to answer your question there are added costs but added benefits as well. Also to say full season is definitely going to pay off more is foolish thinking as well. Since weather, pests and thieves all have more time to impose said damages.

        • The Growers who did make Millions of Dollars got Federally Indicted or turned Rat.
          Nowadays you have to be a Consultant or a Politician to make Millions of Dollars in the Weed Game.

      • light dep returns more and produces higher quality product.

        • My full term was produced at $9.40 a lbs before processing.

          Please explain your margins on light dep.

          Also, by “returns more” I assume you mean money. But your still getting less lbs at a higher cost in light dep. Not too mention it sounds like you can’t sell any.

          At 9.40 a lbs I could sell at 450.00 a lbs and sleep great because of margins.

          Please elaborate.

          • Brian; These guys are newbies you can tell by their comments… They are the ones growing bug infested clones out in the woods and lighting it up like a football stadium… I’ll be glad to see them go the way of the dinosaurs.
            Good outdoors growers don’t need any artificial light, potting soil, pesticides, clones, or liquid fertilizer

            • …or plastic pots, plastic frames and plastic covers.

              …or transplanting…

              Emily, we should charge people for these tips.

          • Doesn’t sound like you’re factoring in ALL of the actual expenses. Stop lying to yourself.

      • From what I have seen, weather and market timing.

    • I don’t understand nhow you were able to cultivate in 2017? I thought legal growing started in 2018.

      • It was legal to have a 215 coop before and caretake for a large number of people, this would be a nonprofit filed with the state that pays sales tax etc, some people had this prior to 2016.

        • Its amazing how much people really believe that every grower is just some free loader who has been living tax free and has money buried somewhere. Haha
          Yes, being a company, cooperative, who has been paying sales taxes, income taxes, and entering this new world of regulation and taxation and being treated like a piece of shit….its rough. Like yo, we have been paying taxes!!! Just because we have been unable to get business licenses previously due to regulation, and humboldt county wasnt getting a specific cut does not mean that we were not compying the entire time since our venture started.
          The county was late to the show, and now we are all taking the hit. Whether we deserve it or not.
          It’s a sad day for many small farmers and businesses.

          • Way, way, way, way too few ever paid taxes at all to scrape up much credit for that. Way, way, way, way too few of those who reported were honest about what they reported.

    • Smart is the person who is careful and reads the small print when doing something as major as this. But the grow world has always been quick to jump on new trends; whether it’s bio-char one year or vermi-fire soil or whatever. The legalization/ permitting business was the same thing; everyone wanting to be like the next guy and jumping on the bandwagon without engaging in critical thinking. Now it’s biting you in the ass… like the other guy said, that’s life! Be careful when you make these gambles and read the fine print.

      • What about when they change the fine print, and you are not notified?
        What about, being a nursery, you are not supposed to be subject to the cultivation tax, yet they are doing it anyway? What about being an indoor grow and getting taxed on your facility square footage, NOT your cultivation square footage. What about getting charged for the use of a consultant, because the county couldn’t handle the deadline they imposed on themselves, with the whole 200 complete applications they had to process (This was not explained to anyone that I have heard from yet). People arent fighting against being regulated, they are fighting it being fair. Whatever that may mean.
        I do not believe anyone was quick to jump on this trend except those who have been operating legal businesses. So, to be treated like a crook, is a slap in the face.
        To be taxed to the point of losing your company, is a slap in the face. To be in an aspect of the business, that was not considered “existing”, in the legislature, and practically going non-op throughout the permitting period costing a years sales, and then getting hit with all this other crap, is a slap in the face.
        Maybe you should sit back and engage in some critical thinking. Open your eyes, and see that those who are suffering are not the ones who have been operating, making hundreds of thousands of dollars annually, and dodging taxes. The ones suffering are the ones who have been doing it right from the beginning.

        If I misinterpreted your post Emily, I apologize, but it got me going. I read all the fine print.

        • I do think the taxes are way too high, I think it’s a terribly arranged situation, I know for sure that the consultants and foresters and surveyors are jacking up their prices when they see you come in the door, and a lot of other things that are rough. I guess I’m saying, then why did you sign up? Why did you hire the consultants? (And there are some good and honest ones btw) It seems like everyone jumped on board and now a year later are finally crunching the numbers and crying fowl. It’s been a bum deal all the way… at least the way I saw it.

        • I know people who run wineries in the county and it’s not nearly as hard to get licensed. Everyone is behind you every step of the way, they are supportive and it is shameful the way this county treats growers. I agree with that. BUT… I don’t think many growers understand the complexities of running a business. It means crunching numbers, business planning, getting there on time and doing a lot of tedious homework. Knowing people in the offices you go to for permits and stuff like that. How many people applying for legal permits went to the class on track and trace? The smart ones did. (I’m not talking about myself here I have no interest)
          There is an outside chance the market may turn out ok for the legal growers, but the way it looks now, is everyone made a bad gamble. Sorry to say

          • The feeling I get from your posts is you are not “sorry to say”. You seem to have a very “us and them” attitude and take shots at permit seekers whenever possible. You are in this sinking boat as well. The difference for you is you will face daily fines and possible jail time. Unless, you are a renter, then the land owner will have the fines attached to their land. Screw renting to black market growers! The plan is to really come down on illegal grows this spring and summer. I hope you have enough money saved up to pay those bills because even black market prices are going to remain low.

            Also, the consultant he/she was speaking of was one hired by the county to help with applications and then charged the applicant for their subbed work.

            • Don’t be bitter. We have different ‘perspectives’, that’s all. I’m not convinced the ‘white’ market is the wrong way to go, I just suspect that it is, from what I’m seeing. I decided to not go that route. That’s all.. plenty of people I know did go that route. Some of them are well informed and driven people, that may be able to eke out a living. From my perspective, it’s going to be a tough road, and once you sign up, there are no u-turns.

              I may have not made the correct choice, but I’m ok to drop the mic at any time if I need to. I don’t have a bunch of DFG paper pushers running around my property telling me which culverts I need to replace and all that BS… no amount of money is worth that to me. I’m happy with my choice.

              • I have nothing to be bitter about.
                “Smart is the person who is careful and reads the small print when doing something as major as this.” comments like this are just lame. The goal post has been moved several times and there is nothing a smart person can do about it.

            • I can def see scenarios where white market will excel and prosper, and scenarios where the opposite would be true. Nobody knows the future, we can only guess. Pass the popcorn, as they say!

          • For us, I have attended the county and state track and trace, already enrolled in the county stupid sicpa program. Hooray for cal origin.
            I have also been to the Dept. Of Agriculture, and done the pesticide certification, and continue to progress everyday, because this has been my life for many years. I believe we will be able to work together to get it all figured out.
            As far as the consultants go, the county hired consultants to assist them in processing applications. They did not tell any of the applicants that they were going to be charged for the use of a consultant.
            Hell no did we go to a consultant on our own accord.
            A little bit of changing the fine print there.

  • It should be taxed like any other agricultural product, no more, no less.

  • There are SO MANY “ Cannabis consultants “ out there who have totally oversold them selves, who are woefully misinformedregarding land use planning, who don’t know what they’re doing, don’t know what the actual permit process is or what each permit requires of the applicant and because of their incompetence, they have NOT come through for the applicant seeking a permit. That’s been one of the BIGGEST holdups for people seeking permits.
    Plus, these “consultants “ are charging an arm and a leg and exhorbitant fees and essentially draining any savings the grower might have, but they still don’t come through and the poor grower still doesn’t get his permit by deadlines.

    • I had a guy try to charge me 1500 to file a permit for me to remove some trees. This wasnt even for a grow, it was for a home.
      He wasn’t the person who would be cutting them down either. Just to file and connect me to a climber.
      Turns out, the permit cost maybe 50 dollars.
      He was going to charge me 1500, to sign a paper, and take it to cal fire. Like, wth?
      When I called him on it, he was like, “oh, well I could drop it to 750”. Lmao.
      Yah, I never called that guy back.
      The price gouging that has gone on here has been outrageous. Ill tell you what, we had horrible timing in trying to get a permit to build our house. One geologist company straight up told me, yes. At the turn of the 2016-2017 year, they increased all of their pricing due to the cannabis industry.

  • Lol, holy shit, you made money off of your crop, pay your fucking taxes. Everyone else has been. Do you think people open up a business and say hey I shouldn’t have to pay taxes on this the first year. Get real. Everyone has to pay for fees and permits as well, welcome to being a productive member of society and a business owner. Keep the lube handy it gets rough.

    • I agree with Guesty. For many years, weed growers have been getting away without paying the taxes that legit businesses & employees pay every year. Quit yer bitchin’ and PAY THE FRIKKIN’ TAXES.

      • Come on, that’s not American! The tax system is set up so if you’re smart or have good lawyers, you don’t have to pay. Ask our prez.

      • What I want to see is how growers are going to pay federal taxes on a still federally illegal crop…..

        • Its already been done, ive paid federal taxs for 2 years now on my collective, the feds just want money they dont care.

    • i guarantee no buisness your in has to pay cultivation taxs ontop of regular taxs, dont you realize that we will be paying all the same taxs as a normal buisness plus these hefty cultivation taxs, now that weed is worth market rate were growing pounds and giving the county 10% in just cultivation fees. meanwhile mendocino its 2.5% witch is a whole lot less.

    • There’s actually isn’t any money left after paying all of the taxes, lol. Kinda hilarious actually.

  • paying taxes isn’t unreasonable its the rate and time line that is unreasonable

    • Huge agree here…we have spent every dollar we made through the fall paying for permitting costs, and now that the year has turned over, the market it flooded, the laws impede our ability to ever deliver our product to market, and the price has fallen through the floor. And we are charged $1/sq ft ($10,000), for a permit that was in effect for 2.5 months of the year (prorated, this would be less than $2,500), for a grow where we only used approximately 1/2 the space, due in 30 days, no exceptions, while the first payment of 2018 ($5000) is due in April.

      I don’t feel averse to paying taxes at all. I do fee averse to paying them unfairly, on a flat fee basis for an agricultural product that VARIES IN VALUE AND MARKET PRICE. We have that value easily, stored in unsold bins of flower, but it’s worth nothing in this form.

      In any event. It will be a moot point if we can’t sell anything in the next 27 days, because we won’t be able to pay it. Sounds like we should have lived in Mendocino county. Their tax sounds human, and reasonable, to pay AT TIME OF SALE, BASED ON THE MARKET VALUE OF THE PRODUCT. WAKE UP HUMBOLDT!

      • Not everyone should be growing pot.

        Supply and demand will apply!

        When everyone in the state gets used to legal pot, the market will implode. If I can buy a little, anytime I want, then who needs a lot?

        You folks are fucked, no matter how you look at it.

        Get a job, at some other level of the industry. Small pot farming is for idiots. Growing pot in potting soil in remote locations, this is OVER!!

        Millions of square feet of greenhouses being built,
        thousands of acres in corporate cultivation.

        You are finished.

      • Mendo has their stuff together. That county wants this to succeed. Too bad we couldn’t say the same about the greedy guts in humco. They will drive all but the largest grows underground, the black market will spring back because not only are they taxing the f#@% out of growers, they are burdening those that consume. I don’t worry about the rec user but I do wonder about the medical needs of others (and no, I am not in the party line that “everyone uses it ‘medically'”). Has anyone looked at other counties?

        • Mendo is a black hole of dysfunction. The growers do what ever they want, mostly behind tall fences, and the county has thrown up their hands.

          Willits, Covello Ukiah, Fort Bragg, these are not affordable places, or even decent places to live. Redwood Valley, Potter Valley, enclaves of craziness..

          Stop whining. Comply with the rules, pay your taxes, or find something else to do, and quit pretending that growing weed is a sensible way to make a living.

          It’s not a birthright, it’s a business, and in this country, those with the gold make the rules…

  • Can anyone tell me about any other agricultural industry that taxes a crop that you didn’t plant.

    There are lots of people that remediate their grows and can’t rebuild without permit.
    They will get taxed on unused space .

    I have no issue paying the taxes on space that is being used

  • Leviticus 25:4

    The Sabbatic Year
    Six years you shall sow your field, and six years you shall prune your vineyard and gather in its crop,
    but in the seventh year the land shall have a Sabbath rest, a sabbath to the Lord, you shall not sow
    your field nor prune your vineyard. Your harvest’s aftergrowth you shall not reap, and your grapes of
    untrimmed vines you shall not gather, the land shall hae a sabbatical year.

  • Where did Jefferey Blanck get his law license, out of a cereal box? He doesn’t know what the price of weed is and doesn’t know what that has to do with it? He is part of the process and is way over his head. The county took something fairly simple and turned into a big mess like usual all out of greed!

  • Exodus 23:11 but during the seventh year let the land lie … – Bible Hub
    biblehub.com/exodus/23-11.htm
    but on the seventh year you shall let it rest and lie fallow, so that the needy of your people may eat; and whatever they leave the beast of the field may eat. You are to do the same with your vineyard and your olive grove. King James Bible But the seventh year thou shalt let it rest and lie still; that the poor of thy people may …
    Leviticus 25:4 But in the seventh year the land is to have a … – Bible Hub
    biblehub.com/leviticus/25-4.htm
    King James Bible But in the seventh year shall be a sabbath of rest unto the land, a sabbath for the LORD: thou shalt neither sow thy field, nor prune thy vineyard. … NET Bible but in the seventh year the land must have a Sabbath of complete rest–a Sabbath to the LORD. You must not sow your field or prune your vineyard.
    the Sabbatical year, why the land must lie fallow | Set Apart People
    http://www.setapartpeople.com/the-sabbatical-year-why-the-land-must-lie-fallow
    Jul 3, 2014 – Exo 23:10 And six years thou shalt sow thy land, and gather in the increase thereof; 11 but the seventh year thou shalt let it rest and lie fallow, that the poor of thy people may … Crop rotation is all the more important in fields where the soil is prone to depletion or where demanding crops have been grown.
    Sabbath of the Land – Ecclesia.org
    https://www.ecclesia.org/truth/sabbath-land.html
    Six years thou shalt sow thy field, and six years thou shalt prune thy vineyard, and gather in the fruit thereof; But in the seventh year shall be a sabbath of rest unto the land, … It is a well-established agricultural fact that resting the land every seven years is best for the soil and that much-improved crops result from doing so.
    Shmita – Wikipedia
    https://en.wikipedia.org/wiki/Shmita
    The sabbath year also called the sabbatical year or shǝvi’it (שביעית , literally “seventh”) is the seventh year of the seven-year agricultural cycle mandated by the Torah for the Land of Israel, and still observed in contemporary Judaism. During shmita, the land is left to lie fallow and all agricultural activity, including plowing, …

  • Mr Denson could you please write a letter to Calfire and see about getting their parcel fee (tax) removed and refund all the money they have stolen from me.

    • I agree. I would gladly pay the fee if everyone else was paying it, but it singles out particular properties. You live one parcel out of city limits, and you had to pay; while your neighbor 200′ next to you didn’t. Glad it stopped. It discriminated against certain prop owners. Now let’s get our money back.

      • Omg this argument again?! You live outside of city limits, you are more likely to need fire protection. It makes sense, think about it. What is with everyone being so against paying for fire protection? Do you know how much it costs and would t you like your firemen to be well set up to protect you? Come on people…

        • They stopped collecting it, so obviously there is something illegal or just wrong with it. Everyone in the state, including city limit properties and accidents on the streets, might benefit from Cal Fire at some point; so a fee for everybody or nobody. I would gladly pay if everyone had to. FYI….my son works for Cal Fire, so I have great respect for firefighters; but that has nothing to do with discriminatory fees.

        • I just noticed that Cal Fire responded to the fireworks fire in Arcata. They are not charged the fee, but get fire protection from Trinidad Cal Fire, so what’s the difference?? A fee for all or none.

        • The money we pay is not for fire protection at all. Check the law that makes us pay .It is for education purposes thats how they passed it with out a vote of ca constituents

        • Some of us are against the fee because it doesn’t actually go towards funding fire fighters. That plus the fact that when you dial 911 to report a fire, the local fire department and/or U.S.F.S shows up (where I live), not CalFire (they get around this by commingling and switching the areas they are responsible for protecting). The fee goes towards education and brush clearing programs. Its also a tax, which is supposed to be voted on by the voters. The fee is an unconstitutional (state) tax targeting rural residents. If they really wanted it, put it on the ballot and let the urban areas vote it in against the rural vote, like they do most other things.

          By the way, numerous houses burned recently inside city limits in the areas of Santa Rosa and Ventura, two of the most damaging fires the state has ever had.

          When I spoke with CalFire management at the fire camp in Trinity County, they all were against it. Too much negative publicity towards them. They all didn’t want it, at least in that way. They want the public to understand what they do, and support them. At the local level the CalFire management was not involved in the development of this fee (tax). It makes sense to me that local fire officials would have some kind of input for something like this.

          If some of the money went towards my local fire department I would be in favor for it, were it placed on the ballot.

          When the fires of 2008 were affecting me, the local U.S.F.S. crew stayed with me until the fire past by my house, and they then saved my neighbor’s place. I fed their fire truck and hoses with water using my own pump. Firefighters are good people, and deserve our support in any way we can support them.

          This fee does nothing to keep our firefighters well set up to protect us, unless you can get them to clearcut around your house down to bare dirt/rock, before a fire breaks out, which I haven’t been able to do.

          Sometimes what appears to make sense makes more sense when thought and public input are involved.

          • Well, when you get dinged by, in my mind, so many useless wasteful fees all the time in life, esp if you run a business, this one always seemed fine to me. Like I said, fire protection is huge, Cal Fire does a lot of good in my mind (not one of those obnoxious state entities like dfg) .. I’m certainly not begrudging them a hundred dollar or so fee.
            Look at some of the fees attached to your insurance premium if you want to get pissed off. Or an airline ticket!

            • I do begrudge the imposition of a tax by circumventing the law in pretending it’s a fee. It was the straw that broke this tax payers back.

              And it has been so effective, hasn’t it? Made a real dent in… nothing but my wallet.

          • If you read into the cal fire tax you will see why it stopped. The governor had to use it for a bargaining chip to pass the new gas tax. The fee has not been ended just put on pause until the heat from the gas tax cools. It is by no means ended and knowing our great state we’ll get back charged for the couple years we didn’t pay.

            • Indeed. Huffman touted it as if it was eliminated but it wasn’t. Just put suspended for 5 years. I wonder if the law suit will ever change anything. Most likely the State will dance around and retool the wording before reinstating.

    • I wanted to fight this one, and thought back to when they put out a fire about 200 feet from my property, and thought better of it. I just consider it as a mandatory donation to cal fire for keeping us safe. Some fights are worth fighting, cal-fire, nah. They need it.

    • That would be nice to receive a refund considering we were already paying a fire tax and donating to our local volunteer fire department.

  • it’s all the Never Cannadissers fault, their green eyes and reefer madness mindset leads to irrational legislation

  • Thank you ED for taking on the county and their incompetent greed machine, you are a champion for the local growers and even though they will probably prevail because they are the crooked powers that be, I applaud you non the less.

  • Ed, should people hold off on paying these fees until this lawsuit gets straightened out?

  • “Prime Ag” … WHAT A SCAM! It should stay in the hills not out in the open

    • Prime ag must fit certain requirents for things like slope and soil type, these things help prevent erosion and water contamination. The only reason it was in the hills before is because it was better hidden from LEOs that way. Do you see other farmed crops in the mountains much? If so get over your bitterness and grow eggplants or something.

      • I call BS on the whole “crops in the mountains” bologna… This is just insider trading nothing more. Special interest, lobbying, etc… The idea that “mountains bad valleys good” is retarded. School kids shouldn’t have to see that… This was a big excuse to rip off the old timers in favor of the suits…. all in the name of greenwashing. AND I don’t even live in California. I just hate to see the OG”s disenfranchised by yuppies from slick con valley and the corrupt local lobby/shills. Big money + fish and game + bad policy = corrupt state of affairs folks…

        The prescoius three toad squirrel in the mountains are going to burn down anyways — global warming has changed the topography… Wake up… The mountains are “THE NEW NAPA”… The prime ag scam? Valleys are going to be too hot to produce good product in a few years…

  • This is all going to get worse before it gets better……

  • Emily, people should pay their taxes “under protest” to keep the penalties from adding up. I believe my law is solid and that I will win this case. I don’t know how long it will take, but I wouldn’t expect a ruling before the taxes are due for those people with permits now. What I mean by under protest is you should pay them with a check that says in the memo section “paid under protest.” If you pay cash, give them a letter with it saying you believe the amount of the tax is illegally high and you are paying subject to the outcome of the case against them. If you can’t pay them because you don’t have the money, be sure and let me know. It’s going to be a mess to get this all straightened out when (if) we win the suit. It’s possible that a case in the Appeals court now concerning Mendocino County will set a precedent that makes the entire Measure S tax illegal, and possibly the Measure Z sales tax as well. But I’m not waiting to find out.

  • I nominate Ed Denson for community member of the year award ! A true Living legend. We always pay our taxes under protest!

  • County tax illegal. Lmao. Really? No? Eh. Still laughing

  • Ah, the myth of the rich grower. We all know this myth. There are rich black market greedbags out there, but anyone trying to go legal has made the decision to be part of society, to make less, to pay their taxes. The problem is the authorities tasked with enforcing prohibition are the ones tasked with regulating legalization. They believe the myth. They are no better than the greedbag black market growers. They want the myth to be real and they want a slice, a big slice, a huge slice. But they also want to drag their feet, treat growers like shit, and extort more, and more, all the while marginalizing the legal grower as they try and cling to the moral high ground or whats left of it.

  • Honeydew Bridge C.H.U.M.P.

    Ha Ha!

    You’ll all be driven away and weed will be a thing of the past….

    Why don’t you Marijuana Caliphate members all play The Beatles song, ‘ Yesterday ‘ as you pack up and move?

    • It use to be “I Can Get By (with a little help from my friends)”. I remember being in awe, growing up, seeing a grow get busted and once the dust settled, ‘brothers’ and ‘sisters’ donated all sorts of stuff to get them up and growing pronto. I was so amazed! Still amazed at that old fashion way. I haven’t seen that type of care in a long while. Most the old hippies have gone to Homer Alaska or went to Corvallis OR where they traded in their love beads to sit with corporate. I wonder where these will go?

      • No hippies left. Neo hippies only, and they write software for Uber and Apple, and drive Teslas and Lamborghinis and live in $5,000,000 apartments in Hayes Valley and the Haight, these folks are the
        future. They can afford weed at $75/eighth and they have never been to Humboldt, or even Mendo. When they do come up, they are disgusted by the “creepy guys” they see everywhere, and if they ever met you, they would never buy your pot.

        It’s a mean world, and it is leaving you in the dust with your dirty-butt weed. Skanking around in the forest and growing shit weed will not support you much longer. Enjoy your time in the land of the lotus eaters, as someone said, and consider your options.

  • Drone pollinators inc.

    A better song. Bring it Sessions.

  • Thank you, Kim, for such a thorough and informative article.

    Thank you, Ed, for being our champion.

    As a cultivator, I agree much more strongly with Mendocino’s approach to taxation. A legal grower won’t be able to misreport their financial information. The state won’t stand for it. Taxing the gross receipts is fair. 2.5% is humane.

    It seems like the logic of measure S was conceived by grade schoolers.

    And while I am on a rant, I’d like to see the county fire a certain Blanck. His responses to Ed’s arguments are an illustration of just how out of touch our county leadership is.

    Yes, growing legally raises production costs. That is not in question. It is the way in which each agency involved in regulating, in addition to the county, have not done the numbers. They are demanding more money than growers trying to get legal can reasonably bear. It is no longer conjecture as to whether or not prices will fall. They have fallen considerably. Even the black market growers are feeling the hurt. The numbers don’t balance out.

    As for all the years growers have profited from no regulation, so has the county!! Businesses, property taxes, sales tax have all benefited from the thriving black market. The county would tax us into an economic void.

    Our climate isn’t as favorable to cannabis growing as Mendocino or Lake county. The new big players in other parts of California are using giant greenhouses to create the perfect growing climate. County leadership needs to pull their heads out of their backsides and create positive incentives for growers to get legal.

    • Kelley Lincoln wrote the article and I agree it is thorough and informative.

    • I think there’s a lot of hostility from those who had 9-5s all these years towards growers in Humboldt more than in Mendocino. It’s not easy to make a cushy living here unless you’ve grown. At least in Mendo the bay area is a reasonable drive away, such a bigger market. Here people barely scraping by look at those neighbors with the endless free time, big trucks, expensive vacations, all the things growers now pretend they never had, and think, should I vote yes on $10,000-$20,000 a year in taxes for those guys on my ballot? Hell yes. They don’t know about weed margins or how other crops are taxed or whatever, they’re not thinking about the particulars of ag biz, they’re remembering all the money thrown around for decades now. $10,000/yr doesn’t look like much next to that. They see the state of our hospitals, roads, schools, etc.. knowing so much cash has moved through these borders with so very little put in for anythimg that wasn’t self- indulgent. This cultural divide isn’t fading any time soon. The community will continue to support these taxes, that’s the reaction greed gets in the world.

      • So True… the hourly worker has been getting screwed for decades and some of the hillbillies were cocky or bad towards women. The backlash brought you Weedmart!

        Well put Not That…

        The fact is, however, that the county just opened up shop for the greediest set of all — the “legal” market….

        As Robert Kiyosaki puts it, having a job is what poor people do… His poor dad was a professor and his rich dad was an investor with no job…

        Taxes should be on consumption and not income — that way it would cost something to show off your new 60K pickup truck. BTW, snitches are mainly jealous busters/haters and nothing more. Or, they got caught up.

        • or they have been blown off/forced off the road road by growers in the fat rigs, had they animals/pets ran over by these pot dozers (and no they don’t stop!) amoung a growing list of complaints against growers that just don’t give a rat’s fart about their neighbors, the community nor the environment that they are trashing … nope couldn’t be that these dickwads are acting on a sub-human level ….

  • The callous disregard for intelligent application of law coupled with willful ignorance of the economy is frightening

  • Thomas Road Oldie But Moldie

    I was fortunate that my Attorney (ED) advised me to NOT sign and return my permit until early Jan, 2018, to avoid the lack of clarity and the manipulations of the county to get me to pay my permit square footage for 2017 (a crappy season, followed by a flooded market and LOW prices).
    I didn’t have enough time to read all the above comments, but want to be sure this aspect, that ED refers to is clear:
    HUMBOLDT COUNTY APPARENTLY SENT A LETTER TO (some) PERMIT HOLDER TO RETURN THEIR NOTARIZED PERMIT BY DECEMBER 31, IN ORDER, SEEMINGLY, TO BE ABLE TO TAX THEM FOR THEIR CANNABIS SQUARE FOOTAGE FOR 2017. If this happened to you, please contact ED.
    And. Permit holder’s need to RISE UP and tell the Supervisors that the tax rates they set, while pot was selling for twice as much, and apparently without regard to the tens of thousands of dollar$$$$$ we permit applicants (the people trying to abide by the law and do the right thing for the environment!) have to spend to conform to the new regs.
    LOWER THE TAXES! Make them ‘float’ with or conform to the (current) reality the cannabis market so that we established, long time (organic, full sun, lower carbon footprint!) growers can afford to stay in business.

  • To everyone who applied for permits to go legal: I told you so.
    I don’t think ED liked it when i told him that he was like the shovel salesman
    during the gold rush, getting his money up front for his permit work.
    That said, how about some happy stories about people who have good
    experiences getting into compliance and rocking it.
    Got any?

  • Lets make that supervisor from above pay the fees to bring their land up to code .

  • No one has responded to ED’s comment about the federal aspects of Humboldt’s ordinance. Isn’t that the great green shark in the room?

  • I’ve been a small scale mom and pop grower for 15 years. We only made enuff money to help pay our mortgage payment and land taxes and hope there was enuff left for christmas. We have been paxing individual taxes on the extra income for years. Because it was the only way to get a decent loan.
    In the new legal push we were excited to be a small batch farmers. Then reality set in where consulting and application fees. No land violations here. But it hasn’t been a huge money maker for us. Just to supplement our low paying humboldt county jobs. So we never really had any saved money from this endeavor or really made enuff to get ahead. With that said the county basically structured it to reward the big existing cultivation sites and squish the mom and pops. We are glad to say we pulled our permit. Because we would have had take a loan just to come into compliance. With the reflection of the market we would have put ourselves into debt that we couldn’t pay. There really isn’t a secure financial route for any farm that doesn’t have quick access to capital investors or a few hundred thousand dollars barried..
    It’s too bad I was excited to be involved.

  • KYM, I hope you will print some form of ESTELLE’s response that is in this week’s INDEPENDENT. What an insulting answer to ED’s very legitimate concerns.😡😠😨

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