Republished from Lost Coast Outpost
After hearing an hour and a half of pleading, distraught public commentary from financially struggling local cannabis growers, the Humboldt County Board of Supervisors gave them a reprieve on Tuesday, voting 3-1, with Second District Supervisor Michelle Bushnell abstaining recusing herself, to suspend Measure S cultivation taxes for the next two years.
Bushnell abstained recused herself because she has her own cultivation operation, and Third District Supervisor Mike Wilson cast the lone “no” vote. He observed that the booming weed economy people are harking back to was based on prohibition. He also noted that while growers may unanimously support axing the tax, a majority of voters approved Measure S.
“That’s the constituency, ultimately, that we are answering to,” Wilson said.
Back in February, the board slashed 2020 Measure S bills by 85 percent, citing profound economic struggles for an industry beset by rampant overproduction and a transition away from small-scale farms in remote forested hills. According to growers who spoke on Tuesday, things have only gotten worse.
Tabatha Miller, the county’s chief financial officer and assistant county administrative officer, said there’s a 57 percent delinquency rate for the current tax year, even with the dramatic 85 percent reduction.
The vast majority of public speakers urged the board to eliminate Measure S completely.
“Everyone taxes the cannabis industry at such an outrageous amount,” one local grower said. He specifically called out the $52.7 million in excise taxes that the county has collected since implementing Measure S in the 2017/18 fiscal year. “It’s great for the county, but it’s killed the entire Humboldt County cannabis industry,” he said.
Others objected to the fact that the taxes are based on cultivation area rather than production quantities or sales amounts.
“It seems like you’re just handcuffing farmers before they’re even out of the gate,” a cultivator named James observed. The owner of Humboldt Renegade Farms also asked for a 100 percent reduction in taxes, saying, “The overtaxation and overregulation is literally killing the small farmer in Humboldt County.”
Nick Erickson, owner of Full Moon Farms, said many Humboldt County farms have already failed, “and we’re gonna see more farms leave this industry before it’s over. That is why I’m asking you all today for complete elimination of Measure S.”
Erickson added that he, for one, is still optimistic about the future of the industry. “The current market is unsustainable for any size cannabis business model, including large corporations,” he said. “It will correct itself to at least have a living wage.”
Honeydew grower Sean Stamm said farming is a lot of work, “and starting indebted for the last three years has been backbreaking and demoralizing.” He beseeched the board, “Help us get through this time so we can make Humboldt great again.”
Karla Knapek of Honeydew Valley Farms said that the lowest amount they were offered for flower last year was $263 per pound while last month they were offered just $200 for a pound. The break-even figure for her business is around $375 per pound. She joined the chorus requesting a 100 percent reduction in Measure S taxes.
When the matter finally went back to the board for discussion, First District Supervisor Rex Bohn said he’d be willing to slash taxes again, even though local growers asked to be taxed six years ago “because you were excited about being legal.”
Still, he said he’d be fine with a two-year suspension or even a four-year suspension of Measure S taxation. He noted that the collapse of the local cannabis industry has had “trickle-down” impacts across the entire county economy.
Wilson then remarked that the inflated value of cannabis was caused by its status as an illegal substance, which impacted communities across the country. And he said some of the restrictions growers still want — from one-acre cultivation caps to crackdowns on out-of-state imports — are all “gradations of regulation” that would artificially inflate the product’s value.
Wilson also observed that the supervisors don’t have the authority to entirely eliminate or repeal Measure S since it was passed by voters.
Fifth District Supervisor Steve Madrone, who attended the meeting remotely, struck a more positive note, saying change breeds adaptation. He also cited the old adage “You can’t squeeze blood from a turnip” and suggested revising it to “You can’t squeeze blood from a bud.”
“Let that be a quote for the day,” he proposed. Madrone went on to say he supported the two-year moratorium on tax collection.
Bohn wound up making the motion to suspend Measure S collection for two years — cultivation years 2022 and 2023, billed in 2023 and 2024, respectively. The motion, which Madrone seconded, also deferred all outstanding Measure S payments until October 2023, and it directed staff to return with recommendations to modify Project Trellis, which uses Measure S revenues to fund micro-grants.
