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Cannabis Tax Survey and Community Meeting

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Cannabis Tax Survey and Community Meeting

Meeting will provide a summary of County and City of Santa Rosa cannabis tax ordinances, and the opportunity for community feedback

The County of Sonoma and City of Santa Rosa will be holding a community meeting on Tuesday, February 21st, 2017, to provide an overview of cannabis tax ordinances from both jurisdictions. The meeting will be held from 6 pm to 8 pm at the Glaser Center, located at 547 Mendocino Avenue in Santa Rosa. The County and the City have been working over the past two years to developing ordinances and policies to create comprehensive regulatory schemes for the cannabis industry tailored to address local needs.

The community meeting will consist of brief presentations on the business tax ordinances being proposed by both the County and the City, which would provide additional resources to assist in implementing and enforcing the land use ordinances if placed on an upcoming ballot and approved by voters. Following the presentation, attendees will have an opportunity to provide feedback and ask questions and get clarification on the draft ordinances.

All residents are encouraged to provide comments and suggestions on the recommended policies for the Board of Supervisors and Santa Rosa City Council to take under consideration. In addition to the Community Meeting, the County and City have also released a short survey to receive input and feedback on various issues and opportunities presented by the proposed cannabis taxes. To fill out the survey, please visit: https://www.surveymonkey.com/r/cannabistax. The survey will be open until Friday, February 24th, 2017.

Additional information on the County’s Ad Hoc, current laws and policies and the regulatory process can be found at http://sonomacounty.ca.gov/Cannabis/. Questions and comments can be emailed to cannabis@sonoma-county.org.

Additional information on the City’s Subcommittee can be found at www.srcity.org/Cannabis.

 


 

What do you know about Measure A?

Cannabis Business Tax

Q: WHO PAYS THE TAX?

A: The tax would be paid by medical and non- medical cannabis businesses that operate in the unincorporated areas of Sonoma County. The tax may apply to any operator in the supply chain (cultivators, nurseries, distributors, transporters, manufacturers, testing labs and dispensaries), but the County can choose which operator types to tax.

Q: WHAT WILL THE TAX PAY  FOR?

A: The cannabis business tax is a general tax, which means there are no specified expenditures. Instead, the County has the flexibility to allocate and adjust funding among essential services in order to address the needs of the community, such as:

Code Enforcement
Public Safety
Roads Repair and Improvements
• Health and Human Services
• Environmental Protection and Clean Up

Q: HOW MUCH IS THE TAX? 

Cannabis Tax Supply and Cultivation RatesA:  The maximum taxation rate for each operator is up to 10% of gross receipts, while the Board can adopt lower tax rates and choose to only tax certain operators. For cultivation, the Board also has the authority to tax based on the size of the cultivation area (square footage) allowed under the applicable permit. Adjustments to the assessed square footage tax can be made for smaller cultivation areas or crop loss. The Board of Supervisors has chosen to adopt much lower starting tax rates to incentivize compliance and offset startup costs.

Q: WHAT ARE SONOMA COUNTY’S LAWS REGARDING CANNABIS BUSINESSES?

A:  The County has been permitting dispensaries in the unincorporated areas for about 10 years. In December 2016, the Board of Supervisors passed a series of laws to permit and regulate nearly all medical cannabis businesses allowed under the State’s Medical Cannabis Regulation and Safety Act.

Permits will not become available until this Cannabis Business Tax passes or another funding source

is secured. The County does not have any laws regarding nonmedical cannabis businesses and thus they are not currently allowed.

Q: WHAT PERCENTAGE OF THE VOTE IS NEEDED TO PASS THE MEASURE?

A: A simple majority of “Yes” votes.

Q: HOW MUCH WILL THE TAX GENERATE?

A: The size of the medical cannabis industry and rates of compliance are difficult to estimate. Based on government and industry surveys and a moderate rate of compliance, the County estimates that the starting rates will generate approximately $6.3 million annually. All revenue will stay local.

Q: HOW MANY OTHER CITIES AND COUNTIES TAX CANNABIS BUSINESSES AND HOW DOES THIS TAX COMPARE?

A: Nearly 50 cities and counties throughout the State have voter-approved tax ordinances that vary by rate and structure. Measure A’s tax rates are average when compared to other jurisdictions, as 10% on gross receipts of any operator in the supply chain is one

of the more typical tax rates and structures.While maximum square footage rates for cultivation are on the higher end, the starting rates, especially for small businesses, are among the lowest.

Q: WHERE CAN I GET MORE INFORMATION ABOUT LOCAL CANNABIS LAWS?

A: http://sonomacounty.ca.gov/CAO/Cannabis/

Comments:

I am asking some questions and offering my perspective on the Cannabis Business Tax Measure A.

We are jumping quickly to add a hefty tax onto an agricultural product. Citing tobacco as an example for this argument, it is an agricultural product that is taxed heavily, so, yes, it makes sense that recreational cannabis would be taxed similarly. Yes, taxation of the wine industry is the model for this taxation of cannabis at every point, including point of sale: grape growers, vineyards, winemakers, wine sellers.  But Measure A would set a precedent that could open the doors to heavily taxing any simply grown plant that the government sees as a way to grab more of our money in the form of taxes.

Growing

And speaking of simply grown… I am almost positive that once cannabis legalization goes into effect, MANY people will be growing their own. How would that be regulated? If we follow the alcohol model, people would be able to grow a certain quantity for their own use. But who will police this, and how do we pay for this ridiculous policing? 

Medical Use vs. Recreational Use

How would the industry determine what is for recreational use and what is for medical use? I think that is nearly impossible. It would not be fair to apply this hefty tax onto a product that is totally for medical use by some users. That’s what big pharma is doing to sick people already, many of which are also in danger of losing their healthcare insurance with this present administration. If she hasn't already, Brownie Mary will be turning in her grave.

My understanding is that no matter how many states have legalized cannabis, and even though the Federal government has made raiding dispensaries a very low priority, cannabis is, federally. still an illegal drug, so that AT ANY TIME, the federal government can use this fact to shut down a state controlled cannabis business. What happens to the taxes collected on an illegal sale? How are we able to tax something that is still illegal? During prohibition, when the government was busting up stills and pouring barrels of liquor and beer down the sewers, there were no taxes collected by the states.

Safety Regulations

One of the government’s arguments for controlling and taxing cannabis is that the purity and consistency can be regulated. I would have more confidence in this argument if I weren’t familiar with what happened to the tobacco industry. Chemicals are added to cigarettes, primarily to keep tobacco more addictive, and even resulting in more carcinogens. Full time lobbyists are powerful enough to keep this deadly product on the market for many decades past the time we learned for certain it is deadly. Who was watching out for the safety of tobacco smokers, hmmm?

We Can Have One Without the Other

It should be remembered that cannabis legalization and Big Pot Commercialization are two different things. We COULD just legalize it, and allow the normal (near 10%) sales tax be enough of a state revenue. The hefty (greedy) tax structure is just money grabbing by opportunists.

There is only one conclusion I can make about this commercial takeover of a grass roots movement: We end up screwed again.

Chris Dec

It's a general tax and not dedicated to its stated objectives.  I believe the tax proceeds will go to shore up public employee pensions, just like all general taxes.  I'm voting no. ~ Stephen Hann

More General Fund bucks.  Fire and EMS services in Sonoma County have been neglected too long!  

Not to mention all these taxes from cultivation thru the chain will make it so expensive the industry will go underground...again.  ~ Liz Martin

All of the county should pay the tax not just unincorporated

And proceeds go to drug and alcohol rehab and schools

The vineyards should pay the tax also

A lot of lives, environment and water are destroyed from vineyards ~ Cress Cresswell

This is wrong for all the right reasons. At least put in something for Sonoma County Veterans. We’re the hardest hit by this law.

Jim Kelly

What is the use tax per acre of vineyard?

Or what is the use tax per acre of lettuce?

~ Cress Cresswell

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