Some local marijuana farmers are feeling as though they're getting it from all sides.
New state and county laws have them jumping through a host of regulatory hoops, filling out paperwork and deeply engaged in the very bureaucracies many had headed to the hills to avoid. And now two tax men cometh at once, with their greedy little eyes and pinstripe suits.
In addition to the highly publicized state Proposition 64 — which would legalize recreational marijuana use, impose a 15 percent tax on retail sales and a $9.25 per ounce tax on cultivation — locals will be pondering Measure S when they hit the polls on Nov. 8. Measure S would impose a countywide tax on commercial marijuana cultivation, assessing the levy at a rate of $1 per square foot for outdoor grows, $2 for mixed light operations and $3 for indoor. The proposed tax is ultimately projected to bring in more than $7 million annually, if approved by voters.
If the Measure S rates sound steep, they could have been far heftier, as staff had initially proposed levies as high as $6 per square foot before the Board of Supervisors walked them back. Some in the growing community have come out in support for the measure, but to others, the prospect of paying $43,560 in county taxes on an acre-sized grow is too much.
"Measure S is not friendly to businesses or jobs here in the county," Dani Burkhart, owner of the consulting firm Emerald Heritage Farms, said at a recent forum hosted by the Greater Eureka Chamber of Commerce. Burkhart said rising permit costs, "fines imposed by state agencies" and costly engineering work for remediation projects are all squeezing small farmers' bottom line. Measure S, she said, "could be crippling."
But others argue the tax would finally force cannabis farmers to start putting some money into the county budget, which has struggled for years to fund the environmental cleanups and law enforcement demanded by bad actors in the cannabis industry. The millions of dollars in revenue generated by Measure S, they argue, could help pay for road work, environmental restoration, drug abuse treatment, services for victims of child abuse, rural ambulance services and so much more.
"My argument is really simple," said Mary Ann Hansen, the executive director of First Five Humboldt, who was speaking as a concerned citizen at the recent chamber forum. "Humboldt County does not have enough money in its coffers to meet the needs of this county. We have some very large needs."
Hansen pointed out that Humboldt County has lost hundreds of millions of dollars in funding redirected by the state in recent years. This would be a stable revenue source, untouchable by the state, she said.
But it's a drop in the bucket, Burkhart said, pointing to the county's large structural budget deficit and its more than $200 million in unfunded pension liabilities. Plus, the revenue will go directly into the county general fund to be spent on whatever the Board of Supervisors decides, so there's no guarantee it will fix those pesky potholes, be spent kids in need or help cleanup the environmental devastation left by the Green Rush. And that $7 million figure is way off, Burkhart cautioned, arguing it's extremely unlikely the county will hit its projection of having 400 permitted growers next year.
So there you have it. One side is clamoring for funds to expand government programs as the other's decrying the measure as an unfair job killer. One side says the revenue is desperately needed as the other screams that it will be misspent. Come to think of it, maybe cannabis isn't really that different from other businesses after all.