Cannabis growers have expressed concerns with several elements of Humboldt County’s cannabis excise tax, according to a report the Humboldt County Board of Supervisors will receive at the board’s Tuesday meeting.
The main issues listed in the report include concerns over the tax rate, the date the tax goes into effect and its persistence during dryer months when cultivators aren’t yielding as much cannabis to keep up with the payment.
Approved by the county’s voters in 2016, the excise tax is applied to growers based on their type of operation. Growers are expected to pay the tax immediately after receiving permits, which some growers have taken issue with, according to the report.
“Many applicants are unable to cultivate until they install infrastructure on the property, which may take several months,” the report states. “During this time, applicants are unable to cultivate, but are still responsible for paying excise taxes.”
County staff outlined several potential updates to the tax process for board consideration, but the staff noted the flaws in some of the options.
For instance, the county could switch to a tax rate that’s based on growers’ revenue, though the change would require voter approval and the county doesn’t have the “appropriate tools” necessary for the program, according to the report.
Not every change would require voter approval — “it really depends on the changes (the supervisors) wish to pursue,” county spokesperson Sean Quincey said in an email.
A change the board could approve on its own involves shifting the billing cycle to the start of the year, so that growers aren’t stuck paying the tax before they have generated any profits.
Another is reducing the tax rates altogether so growers have to contribute less. The board could approve this change on its own; only tax increases would need to go through the voters.
But county staff noted it’s against the move, saying it would “significantly impact the county’s ability to support the cannabis industry through Project Trellis, provide for children’s mental health services, job creation and public safety.”
The Board of Supervisors will have the opportunity to hear the report and discuss options at its Tuesday meeting.
If you go
What: Humboldt County Board of Supervisors regular meeting
When: Tuesday, 9 a.m.
Where: Humboldt County courthouse, 825 Fifth St., Eureka
Shomik Mukherjee can be reached at 707-441-0504.