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The original item was published from 5/13/2022 6:23:07 PM to 5/13/2022 6:36:54 PM.

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County Administrative Office

Posted on: May 13, 2022

[ARCHIVED] Humboldt County, Cannabis Industry Applaud Cultivation Tax Reduction in Governor’s May Revise

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Humboldt County, Cannabis Industry Applaud Cultivation Tax Reduction in Governor’s May Revise

The County of Humboldt, Humboldt County Grower’s Alliance and the Origins Council applaud the strong and sustained efforts of Governor Newsom, Senator Mike McGuire and Assemblymember Jim Wood to bring much-needed relief to small and independent cannabis farmers in Humboldt County for upholding their commitment to reform the state cannabis cultivation tax in the FY 22-23 May Revise state budget proposal. There are many important issues addressed in the May Revise, including shifting the point of taxation from distribution to retail, and strengthening enforcement efforts, and we continue to urge the Governor and lawmakers to support small farmers to ensure competitiveness in the legal marketplace and continued investment in enforcement of illegal cannabis businesses.

Many of Humboldt County’s cultivators are homestead farmers and the current approach to cannabis policy and cannabis taxation risks severe socioeconomic impacts to these farmers and the community. Current tax policies disproportionately burden cannabis farmers, create additional administrative costs and instability throughout the supply chain, and lack sufficient transparency for the state, businesses, and consumers. The approach outlined in the May Revise state budget is a recognition of this need and takes bold steps to address these issues.

“We want to thank our delegation and the Governor for recognizing how current policies are hurting our cultivators and working against the goals of legalized cannabis laws and regulations,” said Rex Bohn, First District Supervisor and Board Member for the Rural County Representatives for California. “We all want legal cannabis to thrive and to provide the revenue needed to help keep people safe and protect our environment. The proposal in the May Revise is a great step in that direction and we urge the legislature to make this a reality.”

Local cannabis farmers clearly communicated the need for cannabis tax reform, and in February, the Board acted to temporarily reduce the county’s 2022 Measure S cannabis taxes by 85 percent.

“Legalized cannabis requires that we have a healthy cannabis economy, with all sectors operating sustainably,” said Virginia Bass, Fourth District Supervisor and Board Member for the California State Association of Counties. “But right now, our producers are hurting in a big way, and that’s a threat to the entire industry. Humboldt County has more state cultivation licenses than anywhere else in California, and our local economy is feeling the strain. Providing tax relief to cultivators will help provide immediate stability and security to the industry, as well as the entire North Coast. I am looking forward to our partners and the legislature supporting this proposal.”

The proposed state cannabis tax reform policy changes would simplify the tax structure by setting the cultivation tax rate at zero beginning July 1, eliminate administrative burdens and costs, temporarily reduce the tax rate to support shifting consumers to the legal market, and stabilize the cannabis market with policies that are more transparent and can better adjust to market changes.

"Tax reform is more complex than any one policy but eliminating the cultivation tax is a critical piece of the puzzle,” said Ross Gordon, Policy Chair of the Origins Council and Policy Director at Humboldt County Growers Alliance. “We appreciate the leadership of Senator McGuire, Assemblymember Wood, and Governor Newsom in recognizing that the cultivation tax is simply unsustainable for farmers struggling due to collapsing wholesale prices. In the coming days we’ll be reviewing the Governor’s proposal in more detail and look forward to working towards tax reform that benefits consumers, equity businesses, and the cannabis industry as a whole.”

Humboldt County 1st District Supervisor Rex Bohn and 2nd District Supervisor Michelle Bushnell Applaud Cultivation Tax Reduction in Governor's May Revise

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