Sonoma County supervisor wants ‘review’ of cannabis cultivation tax
Following a local industry stir prompted by the state’s threat to raise cannabis cultivation taxes, Sonoma County Supervisor James Gore requested late Tuesday to revisit the tax on pot growers at a future board meeting.
“I’d like to review some sort of suspension,” Gore said, adding his hope the county would place the pressing issue on an upcoming agenda “in some shape or fashion.”
There was no other discussion because the request was made during the public comments section that bans supervisors from openly discussing an issue.
The Cannabis Business Association of Sonoma County and the Sonoma Valley Cannabis Enthusiasts called on the county to repeal the tax as indicated in the Business Journal’s Dec. 1 report.
Cannabis regulatory attorney Joe Rogoway drafted resolutions provided to the supervisors recommending the county lobby the state to repeal the cultivation tax. They’re also asking the county to eliminate or suspend its local cultivation tax for three years.
Rogoway lamented a week ago the unprecedented tax structure was established after voters passed adult, recreational use in Proposition 64 in 2016 based on what farmers could grow on their property. It was based on “the fiction” the industry had unlimited potential.
Ranging from lobbyists to ancillary producers to dispensary owners and advocates, many fear a collapse of an industry already reeling over a drop in prices, ongoing competition with the illicit market and already burdensome tax structures on federal, state and local levels.
From growers to retailers, cannabis businesses pay a multitude of taxes, including excise, sales and employment. Labeling an insult to injury, the U.S. government imposes taxes without even recognizing the industry as legal. But California does, and in turn, taxes the distribution channel every step of the way.
Sonoma County taxes a dozen types of licensed growers from $1.12 to $12.65 per square foot depending on the category.
The state announced Nov. 24 a raise in the cultivation tax rates in January to reflect a rise in inflation, which nationally stands at 6.2%. Since then, at least one cannabis business, leaders of Flow Kana, based in Mendocino, told the Sacramento Bee that it may not pay.