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Napa County cannabis legalization effort may be nearing the ballot box

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Napa County doesn't allow cannabis grows, but one group looking to change that via the ballot box may be nearing a milestone.

Eric Sklar, founding board member of the Napa Valley Cannabis Association and CEO of cannabis company Fumé, on May 20 updated farmers, cannabis business people and other professionals on the effort to put the matter before the county's voters.

Speaking at the association’s spring education and networking event at Dos Colinas in the Stag’s Leap District of Napa Valley, Sklar said the group has begun collecting signatures to place an initiative on the March ballot to allow cultivation and other activities.

He later told the Business Journal that his organization started collecting signatures on Friday, May 17, and had 3,500 as of Sunday night, May 19. That's out of 5,300 valid signatures needed by late September to qualify for the March ballot.

The group plans to turn in about 7,500 on Wednesday, May 29, more than three months early, Sklar said.

“We’ve been fighting for 30 months since Prop. 64 was passed to get reasonable cannabis laws passed,” Sklar said to those attending the event. He was referring to the November 2016 ballot measure legalizing adult-use cannabis in California.

The ballot effort came after the Napa County Board of Supervisors refused to debate the issue, Sklar said.

“We said to the supervisors, ‘If you’re not going to do it, we will,’” he said at the event.

Prior to legalization of recreational pot last year at the state level and even now, the industry was too driven by maximizing yields and the level of the prized psychoactive ingredient, THC, in cannabis, said Alicia Rose, an association board member and founder of cannabis company HerbaBuena.

Instead, quality cannabis, like wine, should be given “the natural biological time to ripen,” Rose said. Indoor growers' pushing plants to eight harvests a year was “good when you’re looking at this from a cash crop perspective, perhaps not when you’re looking at this from a highest-expression perspective,” she said.

The event featured speakers from the advocacy group dedicated to opening Napa County to cannabis cultivation, where it is currently prohibited, as well as an update on state policy and regulations from Nicole Elliott, senior adviser on cannabis at the Governor’s Office of Business and Economic Development.

Elliott, the state adviser on cannabis, highlighted the revisions made by Gov. Gavin Newsom in his most recent budget proposal, which factored in lower tax revenue from legal cannabis in California than previously hoped for.

The vast majority of cannabis sales remain on the black market despite legalization in California, contributing to the lower tax revenues. Elliott said the budget “generously described a third of the state participating in the framework,” adding it could be as low as one-quarter.

Despite that, Elliott said tax revenue was able to cover the cost of administering the legal cannabis infrastructure in the state, with about $200 million left over.

Elliott noted Newsom wanted to spend 20% of that money on remediating and restoring locations where illegal cannabis grow operations have damaged the environment, another 20% on enforcement and the other 60% on issues like preventing youth access to cannabis, research and other endeavors.

Of that money, the proposal envisions $12 million going to the California Highway Patrol to then provide grants to local jurisdictions to support cannabis impairment enforcement and education. Newsom also wants to send $26 million to jurisdictions that allow for retail and cultivation operations, unlike Napa County.

But the city of Napa does allow for medical cannabis dispensaries.

A vocal audience in the ornate Italian-style villa where the event was held grilled Elliott on what they consider roadblocks to entering or remaining within the state framework, including a 15% excise tax that some consider excessive.

One question asked what the state is doing to eradicate the black market, opining that a proposal to lower the tax to 11% would likely have little impact.

Elliott acknowledged the burden of the tax and other regulations, noting testing costs are an area the state could look to reduce regulations and fees.

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