Pubdate: Tue, 23 Aug 2016
Source: Ukiah Daily Journal, The (CA)
Copyright: 2016 The Ukiah Daily Journal
Author: Will Houston


Humboldt County's proposed excise tax for medical marijuana farms has 
created a rift between local growers.

Several farmers have come out against the tax model, calling it 
premature, hasty and partial to larger farms. Other cultivators say 
they are supportive of it and feel that the time is ripe to pay their 
fair share in society to bring in badly needed revenue for county 
schools, roads and mental health services among others.

But the recently created Humboldt County Cannabis Chamber of Commerce 
argues the tax measure as written "misses the mark" on those funding goals.

The Humboldt County board voted to put the tax on the ballot earlier 
in August. It is expected to bring in $7 million annually.

"A wise tax policy could ensure Humboldt's sustainability for the 
rest of the century," the chamber's Board of Directors wrote in an 
opposition statement this month. "The measure being put forward not 
only fails to provide economic sustainability, but will actively 
decrease our resources to achieve it. This will set a terrible 
example to the rest of California's counties as they consider their 
own tax policies."

The county's tax proposal would implement a $1 to up to $3 fixed-rate 
tax for every square foot of medical cannabis cultivation. Indoor 
grows are taxed at $3, mixed-light at $2 and outdoor at $1 per square foot.

As a general excise tax, the revenue would go directly to the 
county's General Fund, allowing the Board of Supervisors to spend it 
as the supervisors will. The Board of Supervisors has stated that it 
plans to use the tax revenue to fund a variety of services such as 
mental health, drug addiction, public safety, and environmental 
cleanup of illegal cannabis grows.

The Cannabis Chamber of Commerce and many other growers are calling 
on the county to change its model and tax growers based on the amount 
of product yielded from their farms as the state already does with 
other agricultural products. According to the chamber's Board of 
Directors, the county's current model does not take into account 
issues such as crop loss or low yield, which could result in growers 
having to pay a fixed tax while also having to make up for unforeseen 
revenue losses.

Isaiah O'Donnell, one of the founding members of the nonprofit 
Emerald Family Farms mutual benefit company representing around 10 
medical cannabis farms, holds a different view. He states the tax 
measure is fair and has a simple structure that falls in line with 
what other counties are considering.

"We need that simplicity right now as we're emerging from the shadows 
and creating legitimacy to the industry," O'Donnell said. "I think 
the supervisors did a very good job knowing how much investment it 
takes to bring one of these farms into compliance."

But the Cannabis Chamber of Commerce states the county's tax proposal 
is not taking into account the burden placed on smaller farms that 
are already struggling to bring their operations into compliance with 
local and state laws over the next six months.

"The timing of this measure impacts small farmers much more deeply 
than large, factory style farms," the chamber Board of Directors states.

"In the next 18 months, small and large farmers are burdened with the 
same fees, farm upgrades, and new operating expenses," the chamber 
states. "Small cannabis farmers are currently less able to absorb 
these costs without the agricultural infrastructure afforded other 
small farms in Humboldt."

Humboldt State University has taken note of the regulatory hurdles 
medical cannabis farmers are having to overcome in order to avoid 
being labeled a criminal. To help medical cannabis business startups 
navigate the new rules and requirements, Humboldt State University 
students have created an online business toolkit with information on 
the steps that need to be taken and the resources currently available 
to aid them.

"For better or for worse, local business owners will have to 
professionalize in order to compete with much larger commercial 
enterprises eager to exploit the California market," a joint letter 
from HSU Associate Business Professor Josh Zender and HSU Grant 
Analyst Sam Barton states. "Although the Humboldt brand will remain 
strong, collective action will need to be cultivated to achieve 

The HSU business toolkit can be found online at
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MAP posted-by: Jay Bergstrom