Suggestions for Humboldt County; A Letter to the Editor by Salmon Creek Cannabis Farmers
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Following the outpouring of public testimony at the Public Comment Session at the Board of Supervisors meeting yesterday, February 13, 2018, we would like to continue the discussion and offer some suggestions to move the licensing process equitably forward.
The fact that there are many, many concerned small farmers is without question. You heard pleas, tears, complaints and suggestions to improve the financial burden on the small farmers from all over the county. This is not an isolated group of farmers with a “no tax” agenda. These are farmers who want to participate in the fiscal and regulatory process and have been paying large sums to comply but are being squeezed out of the system that was supposed to be sympathetic to the small farmers.
We believe that the extreme up-front taxes represent a short-sighted vision, and the County should look at the potential medium- to long-term economic benefits including sales and employment tax revenue resulting from a healthy legal cannabis economy built on small farms.
Along with many other small farmers in the County, the Salmon Creek Association of Small Farmers wants to continue the dialogue and bring substantive changes. We would like the County to consider the following requests:
- We offer ourselves as members of the Ad Hoc Committee on Cannabis headed by Estelle and Ryan. Who else is being invited to be on this committee? The membership should be a broad based group including small farmers.
- We propose that the Tax for 2017 be cancelled. The “shadiness” of the wording and the inequitable distribution of those taxes are unfair. Some farmers were taxed for the whole year even though the interim permit was issued in the last months. Some farmers did not grow and were taxed. Some grew, were in the permit process, but didn’t respond before the end of the year and were not charged. Several lawsuits are going to be filed to question the legality of the Measure S implementation. To avoid these suits, rescind and revise your implementation of Measure S.
- At the very least, taxes should only be applied on an annual prorated basis from the time the temporary permit was issued, not for the whole year. As one public speaker said, how can you tax retroactively on a product not even produced nor permitted? Even Building Permit Fees are levied upon the date of permit approval, not for the whole calendar year. Additionally, these taxes are being levied for only an interim, provisional permit.
- Taxes for 2018 need to reflect the true market rather than assuming that the small farmers can be taxed on presumed profits based on unrealistic product prices and nor should the taxes be calculated on farm square footage. It is true that the prices are falling for the cannabis, so will the capacity for the farmers to pay these taxes based on presumed profits. Yes, other counties are charging more per square foot, but many of them are just now cutting their tax rates in half, realizing their first efforts were too high. Humboldt County is the origin of the cannabis industry; build on small farmers, not large industrialists and corporations. Your promise was to support the small farmer and their origins, where other counties are jumping on the “tax the industry” bandwagon. At minimum, Humboldt should follow Berkeley and Monterey and cut their tax rate in half for 2018.
- Consider a “Green Tag” permit. That would be an administrative, over the counter permit to cultivate, a costing $2500 flat fee. $1000 would cover County Administration costs, and $1500 would be held in escrow for each farmer as an advance on any future remediation deemed necessary further along in the full permit-to-cultivate process. This modest up front cost would bring in many black market farmers, swell the ranks of legal participants, while still allowing the County to maintain control over size, setbacks and types of grows.
- Most realistically the taxes should be based on profits, as Mendocino is doing, and is the standard for wine, beer and liquor industries. Your presumption that taxing on the privilege to grow before any product has been produced has only strengthened the case for black market growers to stay in the shadows and fire up their old diesel indoor grows while continuing to cause undue hardship on those seeking to be legal and within the system.
- The drought is also causing a potential environmental disaster because farmers are being taxed by the square foot but with lack of rain fall, farmers cannot reduce their square footage because of the drought, but are being force to up their planting total. Taxes should be based on product profit, not square footage.
- Consolidate the redundant “Track and Trace” systems with the State’s system.
- Find a mechanism to cost-effectively leverage enforcement of the ~8,000 non-applicants without relying on small farmers taxes.
If the goal for cannabis compliance is to eliminate environmental degradation, reduce the black-market sales of cannabis and bring existing farmers into the fold, Humboldt County (and the State of California), are doing the exact opposite and it is affecting the small farmers: driving them into bankruptcy, further away from compliance and strengthening the black market operators logic that the governments are not really interested in working with the small farmers, but shutting the small guys down to only allow the big, well healed, corporate, out-of-the-area operations into the coming new age of adult and medical use of cannabis.
We recognize the complexity and fluidity of the process and the fact that the County is getting a lot of pressure from other agencies and environmental groups to slow environmental degradation reduce the black market, monitor water use, and save the fish and amphibians. We appreciate the County’s hard work moving this process forward and believe that small compliant farms can be the County’s ally in this effort. Small compliant farmers are willing to pay reasonable fees for entry into the cannabis market and strive to make our farms as environmentally friendly as possible. However, the current heavy-handed taxes and fees, coupled with ballooning compliance costs and an ever-lowering market value for the cannabis that we produce are seriously imperiling the future viability of our farms and the sustainability of Humboldt County’s economic future.
Please hear our pleas and those who spoke passionately and from the heart on February 13. We look forward to your responses and your cooperation with this large faction of your electorate. We hope you heard from us and will provide relief of substance. We look forward to your feedback and outreach.
Small is Beautiful, Especially Small Taxes on Small Farmers.
Signed by The Salmon Creek Farm Association of small, outdoor, farmers looking for carrots, not sticks:
Huckleberry Woods, Hope Springs Farms, Cherry Valley Farms, Fire Robin Farms, Bamboo Farms, All in The Roots Farm, Grindstone Ridge Gardens and others.