Board also seeks flexibility from state in letter.
The Humboldt County Board of Supervisors took several actions Tuesday to aid struggling cannabis farmers facing a flooded market and falling cannabis prices throughout the state.
The board directed county staff to provide more time for cultivators to pay taxes related to Measure S, the county’s commercial marijuana cultivation tax, and to implement Measure S tax incentives for water storage and renewable power. Supervisors also agreed to send a letter to the state asking for “regulatory changes to allow licensed cultivators to keep their license active and reduce their cultivation area,” as stated in the staff report.
Humboldt County Planning and Building Director John Ford said the county’s Cannabis Ad Hoc Committee has held several meetings with the cannabis community to identify primary issues and potential solutions within the industry.
“The biggest issues that they identified relate to the payment of major taxes and the cost of installing improvements,” he said. “Those improvements come in two forms: county-required improvements and also improvements required by lake and streambed alteration agreements that are often required as part of projects.”
Ford noted that the county will often extend deadlines for cultivators if they can demonstrate that there is progress being made on the improvements.
“The California Department of Fish and Wildlife has expressed an extreme willingness to work with cultivators to extend the timeframe for installation of those improvements provided that people are working towards completing that work,” he added. “The key thing — and I really want to say this so everybody hears it — is it really demands that there is communication. Just like with the county, it’s important to communicate with (Fish and Wildlife).”
Cannabis cultivators also raised concern for State Department of Cannabis Control requirements and “the inability to allow fallowing or reduction in cultivation area without running the risk of losing their cultivation licenses,” Ford said.
The draft letter to the Department of Cannabis Control notes that “Humboldt County has experienced success in allowing cultivators to reduce their cultivation area by declaring their intention prior to the cultivation season.”
“Allowing such an incentive provides the ability for cultivators to reduce cultivation in response to market conditions, environmental conditions (drought, wildfire) or other factors (family health) without having the fixed overhead of annual state costs associated with a license,” the letter stated. “This allows cultivators to make better decisions about how to position their product in the marketplace or in response to other factors, rather than being incentivized to maximize cultivation area.”
Turning to the board, 2nd District Supervisor Michelle Bushnell noted that “while it looks like we’re going overboard for the cannabis community,” cultivators have not had access to federal COVID-19 relief funding, further exacerbating financial impacts to the industry.
“They haven’t gotten any financial relief at all through the last year and a half where most businesses, if not all, that applied got COVID relief monies and COVID funding,” she said. “I just really want the community to understand it’s not that we’re just singling out the cannabis community to help them, this is the first relief they have had (access to).”
Fifth District Supervisor Steve Madrone said he had received several calls from community members regarding the $1 million in relief funds approved by the board on Sept. 21 to be used for “a distinct microgrant program” through Project Trellis, the county’s cannabis microgrant, marketing and local equity program.
“There’s been a lot of confusion about that $1 million that we approved two weeks ago and just to be clear for the public, that money was primarily already authorized over a year ago to go to the Trellis program, but due to COVID, we weren’t quite sure what the county’s revenues were going to be looking like and so the money got pulled back,” Madrone said. “What we did two weeks ago was basically just replace an action that we took over a year ago.”
Similarly, 1st District Supervisor Rex Bohn said he had several calls from cultivators asking when the county will distribute grant funds to awardees.
Humboldt County Economic Development director Scott Adair said his office is working closely with the auditor-controller’s office “to make those payments” but said there was a delay when “temporary vendor IDs needed to be established for the equity grantees … that caused some of the payments to those equity grantees to be stalled.”
“Some of those are still in process and some of those entities have still not yet been paid,” he added.
Returning to the subject of delaying Measure S taxes, Bushnell asked Ford if the county could “explore a payment program” to further accommodate folks who are not able to pay the second installment of 2020 taxes due by Oct. 15.
Staff’s recommendation suggests the board direct the treasurer-tax collector’s office to not assess late fees for any late payments if payments for the second installment of 2020 and the first installment of 2021 – due April 2022 – are made by the end of May 2022.
Ford noted that the treasurer-tax collector’s office is “not set up to collect payment plans,” noting that it would be “a huge burden for them.” He suggested amending staff’s recommendation “to defer the tax payments without penalty with an additional direction to develop alternatives for the main payment.”
Bushnell agreed, noting that Ford’s solution was “the quickest relief we could come up with for right now” and made a motion to move forward with staff’s recommendation with the aforementioned amendments. She also asked to send a second letter to the state at a future date to address other, less pertinent issues.”
The motion was seconded by Madrone and unanimously approved in a 5-0 vote.
Isabella Vanderheiden can be reached at 707-441-0504.