Competing pot tax Mendocino County measures headed to November ballot

Mendocino County voters can expect two competing marijuana tax initiatives on the November ballot, one proffered by county officials and one by cannabis cultivators.

The Mendocino County Board of Supervisors approved Tuesday a 2.5 percent business tax on gross sales from marijuana cultivation and dispensaries, along with a $2,500 annual fee on marijuana distributors, delivery services, nurseries and testing laboratories. That business tax could be raised in increments of 2.5 percent up to a maximum of 10 percent, whether on medicinal or recreational pot.

Marijuana advocates also are proposing a 2.5 percent tax for medicinal pot in their Mendocino Heritage Initiative of 2016, which recently qualified for the ballot. Their initiative additionally allows a 5 percent tax on nonmedical pot.

Both initiatives’ taxes would be in addition to state sales taxes.

Neither county nor heritage initiative representatives know how much money will be generated, in part because currently the industry is largely underground. But data from a one-time study conducted by the California Board of Equalization for Humboldt County estimated there was some $5.9 million in taxable marijuana sales in 2014, department officials said.

The heritage initiative would allow up to an acre of cannabis to be grown on parcels of 20 acres or more. Currently, the limit is 25 plants per parcel, with 99 allowed with a special permit from the Sheriff’s Office. The initiative also allows cultivation almost anywhere in the unincorporated county, from land zoned suburban residential to timber harvest production zones. Gardens must be located at least 100 feet from the nearest legal, occupied residence that’s on a separate parcel of land.

Both the initiative and the county measure were created largely in anticipation of new California regulations for medical marijuana and the anticipated passage of a statewide November ballot measure seeking to legalize cannabis for recreational use.

Already thriving cannabis cultivation and related businesses are expected to boom as pot gains mainstream acceptance and legitimacy, said Tim Blake, a proponent of the initiative and founder of The Emerald Cup competition, an annual competition that began as an underground harvest celebration in northern Mendocino County and has since expanded and moved to Sonoma County where it’s known as the region’s premier.

He expects legitimate cannabis endeavors will dwarf the wine industry in the future.

“It’ll be as it should be, the No. 1 agricultural crop in the world,” Blake said. The new wave of pot production will create jobs, generate tax revenue and increase land prices, he predicted.

The initiatives are among a slew of marijuana regulation and tax measures being crafted throughout the state, many in preparation for implementation of the state’s Medical Marijuana Regulation and Safety Act. Officials in Mendocino, Lake and Humboldt counties and the city of Cloverdale are among those working both on tax or regulatory measures or both.

Mendocino County also is working on an ordinance to regulate marijuana production and sales. Its proposal must go through an environmental impact review before it can be adopted.

Sheriff Tom Allman declined to comment specifically on the two ballot measures, but said a sharp rise in cannabis cultivation would be concerning, given ongoing problems with people ignoring growing limits and regulations, and causing environmental degradation.

“I don’t expect this to alleviate the problem,” he said.

You can reach Staff Writer Glenda Anderson at 707-462-6473 or glenda.anderson@pressdemocrat.com. On Twitter @MendoReporter