Humboldt County vets cannabis advisory committee to vet tax concerns

Humboldt County Planning and Building Director John Ford, foreground, provides an update to the Board of Supervisors on Tuesday in Eureka about cannabis business permitting and concerns raised by some growers about the county’s cultivation tax model.
Humboldt County Planning and Building Director John Ford, foreground, provides an update to the Board of Supervisors on Tuesday in Eureka about cannabis business permitting and concerns raised by some growers about the county’s cultivation tax model. Will Houston — The Times-Standard

With California’s cannabis market now in full effect, the Humboldt County Board of Supervisors is proposing to create new public advisory body to help guide the county through the new era of regulation.

Planning and Building Director John Ford, whose department oversees cannabis permitting in the county, raised the idea of potentially creating an advisory committee made up of regulators and industry stakeholders to advise on the evolution of the industry.

“I think the market and the business and the industry is going to transform maybe faster than anybody could have envisioned now that the state regulations are out,” Ford said to the board on Tuesday.

The board voted unanimously Tuesday morning to disband its medical marijuana ad hoc committee and form a new ad hoc committee that will be tasked with determining what the new advisory committee’s makeup and function would be.

The ad hoc committee was also tasked with reviewing complaints from cultivators about the county’s cultivation tax model and reviewing the county’s track-and-trace system for cannabis businesses. Board chairman and 5th District Supervisor Ryan Sundberg and 2nd District Supervisor Estelle Fennell were selected to serve on the new ad hoc committee.

Ford said cultivators have expressed frustration at the county’s cultivation tax model, which taxes growers based on how much square-footage they are permitted to grow and not by how much they produce as the state cultivation tax does.

Growers who received an interim permit from the county in 2017 will have to pay taxes for that year, Ford said, with tax bills starting to go out this Friday, according to county Administrative Officer Amy Nilsen.

About 310 interim permits were issued out of the nearly 600 growers who were eligible for them, Ford said. The interim permits were provided to cultivators who had farms in existence before January 2016. The permits limit the cultivator from growing more than what they had been growing at that time.

The interim permits were provided to allow cultivators to apply for state licenses by the time the statewide market opened on Jan. 1. In order to be a legal cannabis business owner in California, a person must have approval from their local government and the state.

What frustrated some growers, Ford said, is that growers who waited until Jan. 1 to obtain an interim permit do not have to pay taxes for 2017. Ford said these growers are calling on the county to create an even playing field, either by requiring the cultivators who waited until this month to get their permits to pay taxes for 2017 or by waiving tax payments for interim permits holders altogether.

Emerald Heritage Farms cannabis consultant Dani Burkhart said that she receives questions daily from growers about whether they will have to pay their taxes.

“That’s the No. 1 question I get every day,” Burkhart said to the board.

Fennell and Sundberg were directed to report back to the board by April with recommendations.

Will Houston can be reached at 707-441-0504.

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