Project Trellis: The Tax Man Giveth Back to the Cannabis Community
The Humboldt County Board of Supervisors voted unanimously March 12 to reinvest a portion of its cannabis excise tax revenue back into the industry it came from.
In a series of votes, the board approved plans to create a local “equity” program aimed at helping those impacted by prohibition and the drug war, a board to award micro-grants to the industry and a marketing plan designed to promote Humboldt County cannabis.
Passed in 2016 with 66 percent voters approving, Measure S imposed a $1 to $3 per-square-foot excise tax on commercial cannabis cultivation countywide. It has so far generated approximately $17 million in revenue.
The plan approved by the board, known as “Project Trellis,” is to take at least 10 percent of that — $1.7 million — and spend it on efforts to boost the local industry. The approach has three basic prongs.
The first is to create a local equity program that is essentially designed to tap into $10 million in state funding created by Senate Bill 1294, which sought to recognize the damaging impacts of cannabis prohibition on disadvantaged communities, particularly those of color, and to undue some of the damage done by the war on drugs by creating a more equitable playing field. Because much of the state’s marijuana eradication efforts took place in Humboldt County, where paramilitary troops dropped from helicopters with assault rifles to cut down plants, county staff believes Humboldt fits the bill’s designation.
With the board’s vote, the county will appropriate at least $170,000 toward creating a local equity program. The state has pledged to give grants of at least $100,000 to local jurisdictions that have equity programs in place, with the balance of the $10 million in S.B. 1294 funding to be split evenly between the jurisdictions. (That means if only 10 cities and counties form equity programs and apply for the grant by the April 1 deadline, each would receive $10 million.) At this point, it’s not entirely clear how this local equity program would work, as the board’s vote simply directed staff to “write and implement” the program details.
The second prong the board approved March 12 is a micro-grant program that will make at least $340,000 available in small grants to the local cannabis industry. The idea is that because federal prohibition means cannabis businesses can’t access the same loans and services as their traditional counterparts, they may need a leg up in the form of small grants or loans to help with business improvements, compliance costs or other things. These grants will be distributed by a committee — made up of one delegate from each of the five supervisors, as well as two at-large delegates, one from the cannabis industry and another from a “lateral” industry, like banking or finance. The committee will also be tasked with making program guidelines and eligibility recommendations to the board.
Finally, the third prong is the creation of a $1.19 million fund to pay for a Humboldt County specific cannabis marketing initiative. With the board’s March 12 vote, the county will issue a request for proposals for a cannabis marketing and branding plan that — coupled with point of origin stamp program — will try to build the Humboldt County cannabis brand, particularly in the urban centers of San Francisco, Los Angeles and San Diego, home to the state’s largest cannabis retail markets.
Of course, figuring out the best way to market and brand all Humboldt County cannabis under a single campaign is no small task, so it will be interesting to see what kinds of proposals the county receives moving forward.
Some inside and outside the world of cannabis have questioned the logic behind taxing an industry only to then turn around and use the revenue generated from said tax to subsidize that very same industry. (Trump tariffs, anyone?) But others have expressed that the proposal doesn’t go far enough. Fifth District Supervisor Steve Madrone, for one, said he’d like to see up to 50 percent of Measure S revenue funneled back into such efforts.
Public comment at the March 12 meeting, meanwhile, was universally supportive of Project Trellis.
“Today is a momentous day for Humboldt County,” Humboldt County Growers Alliance Operations Director Natalynne DeLapp told the board.