The Humboldt County cannabis industry is knocking on death’s door and the Board of Supervisors has the power to buy it more time. California cannabis is being strangled by over-regulation, over-production, over-taxation, and Humboldt County farmers are feeling the brunt of it. Flower prices have fallen by two-thirds and an alarming number of farms are up for sale — these are the foreshocks of an impending economic collapse. It is currently projected that if circumstances remain unchanged, more than 50% of Humboldt County farms will fail. While regulatory change must occur at the state level, immediate relief is needed to prevent Humboldt County’s local industry from failing. The Board of Supervisors can provide this relief by suspending Measure S — the county cultivation tax. It’s time for the board to provide a lifeline to an industry on the verge of economic collapse, a collapse that will impact virtually every other business in the county.
In 2015, traditional market farmers — myself included — met with local law enforcement, legislators, and regulatory agencies to determine a path of cooperation between the county and farmers who were ready to go legal. They asked the local grassroots leadership to be brave with an idea that would be wildly unpopular with the industry. While traditional market farmers have always contributed to Humboldt’s local economy, we agreed to the county’s request to support the Measure S county cultivation tax. At the time, when the industry was robust and healthy, it was the right thing to do. But things have changed.
This tax — an entitlement tax not based on sales or production, but rather on square footage of allowable canopy — is a tax on our right to grow, a tax in addition to property taxes, license fees, state cultivation taxes, state and federal income taxes. We pushed our fellow farmers and ultimately agreed to the cultivation tax because the funds would come directly back to bolster Humboldt County’s community, and we wanted the citizens of Humboldt to know we were committed to investing here — for the benefit of our families, employees, and businesses, too. So far Humboldt County farmers have paid more than $47 million to the county’s general fund.
But the dire situation the cannabis industry is in today does not reflect the circumstances under which we initially agreed to this tax; the failing market dictates the Board of Supervisors step up to stave off this extinction event for legacy farms by looking to other municipalities — such as San Francisco and Rio Dell — which are taking bold action. The state recently started accepting applications for a one-time Equity Fee Waiver for State application fees, and the city of Eureka is following suit with a resolution supporting a dramatic reduction of state cultivation taxes — the state is listening and so should the county.
I implore the county to:
Provide immediate relief to Humboldt cultivators by suspending Measure S. This is the best way to compete with the illicit market’s lower prices.
Provide long-term and sustainable relief by restructuring the county tax rate to a tiered approach favoring small farmers, or a flat rate based on actual sales or production.
Work with other counties to lobby the state to eliminate the cultivation tax for farms under an acre and for a regulatory overhaul to mitigate the continued and unchecked overproduction on the legal market alongside a flourishing and enormously competitive black market.
I acknowledge this is a decision the Supervisors may not want to spearhead; the stigma of cannabis and Humboldt’s legacy farmers still runs deep among their constituents. But feelings and politics aside, Humboldt’s economy is directly tied to the success of cannabis. Our money flows into businesses that not only cater directly to the industry, but into our restaurants, salons, car dealerships, boutiques, and every other corner of our local economy. If we don’t suspend Measure S to support these farms, they will shut down.
These are immense issues to overcome, but the time is now, before thousands of jobs are lost with the closure of these farms. This community and ultimately this Board of Supervisors needs to decide if cannabis will continue to be a part of Humboldt’s economy and legacy, or if we will continue in our cycle of boom and bust industries. If Humboldt cannabis fails, Humboldt’s economy fails. I ask the board to do the same thing they asked of me, to be brave and do something that will be wildly unpopular with some, but will benefit us all: suspend Measure S.
Isaiah O’Donnell is the operating partner of Winterbourne Farms and a manager for Bear Humboldt.