Pot taxes set for Mendocino, Lake counties, Cloverdale ballots

Intent on tapping the economic green rush of legal marijuana, Mendocino and Lake counties, and Cloverdale and Point Arena, have placed cannabis taxes on the Nov. 8 ballot, with Sonoma County and Santa Rosa planning to follow suit next year.

Those local and county officials see cannabis business taxes as a way to pay for regulating the emerging industry and bolstering public services such as law enforcement, roads, parks, libraries, youth and senior programs, and mental health care.

They are part of a statewide wave of local governments - at last count 32 cities and nine counties - attempting to cash in as California moves toward legalization of marijuana for adult use, a measure on next month’s ballot that could create a pot industry valued at ?$6.5 billion by 2020, according to one estimate.

Sonoma County and Santa Rosa officials are working jointly on pot tax plans that could be approved separately by the Board of Supervisors and City Council in early December, in time to put them on a special election ballot in March.

“We want to be on the same page,” said David Guhin, director of Santa Rosa’s Planning and Economic Development department.

Supervisor Efren Carrillo said he did not know the tax rates, but thinks they will be tiered to give smaller cannabis businesses a break. The overall rates might “start low,” he said, to encourage growers and other businesses to apply for permits.

Tawnie Logan, executive director of the Sonoma County Growers Alliance, said her group supports local taxes on cannabis businesses because the money stays in the community. It opposes sales taxes paid by consumers and any sales tax money that goes to Sacramento instead of locally.

Mendocino County is banking on marijuana tax revenue to “take care of roads and provide all the other services people expect from government,” Supervisor John McCowen said.

“We are a poor rural county,” he said.

The county hasn’t estimated the revenue it might reap from pot taxes, but McCowen said “whatever the amount is we will be able to put it to good use.”

Marijuana is well established as an economic underpinning of the county, part of the Emerald Triangle area said to grow 60 percent of the nation’s weed.

Mendocino voters will consider two tax measures, Measure AF and Measure AI.

Measure AF, known as the Mendocino Heritage Act and written by the county’s pot growers and dispensaries, includes liberal regulations for the cannabis industry and a ?2.5 percent annual tax on the gross receipts of medical cannabis businesses.

Backers of Measure AF “believe that the future of cannabis is regulation plus taxation,” said Sarah Bodnar, the Yes on AF campaign manager.

Measure AI, placed on the ballot by the Board of Supervisors, is limited to taxes: a 2.5 percent to ?10 percent tax on the gross receipts of cultivators and a flat rate of $2,500 a year for other businesses.

If both measures are approved, AF cancels AI entirely if it receives more votes, and AI cancels the tax provisions in AF it gets more votes, but the rest of AF stands.

Lake County’s tax on commercial medical cannabis - ranging from ?$1 to $3 per square foot for cultivation - could raise about $8 million a year, and Supervisor Anthony Farrington has said the county, which allows cultivation, is “expending scarce public resources with nothing in return.”

The proposed tax has the support of the Lake County Growers Association.

Cloverdale’s proposed marijuana tax could generate $500,000 from medical cannabis businesses, and even more if voters approve Proposition 64. The city’s annual budget is about $6 million.

“We’re just getting ahead of the curve, I hope,” said Mayor Mary Ann Brigham, describing legalization as “a locomotive coming down the tracks at you.”

Measure P, placed on the ballot by the City Council, would allow the council to charge all cannabis businesses up to 10 percent of their gross receipts. Cloverdale is considering ordinances that would allow cultivation and other businesses, including two dispensaries, Brigham said.

In meetings with local growers, the mayor said they expressed willingness to pay taxes.

Point Arena’s City Council put Measure AE on the ballot, asking the coastal city’s 450 residents to approve a tax of up to ?3 percent of gross sales of medical marijuana and up to 7 percent of recreational marijuana gross sales, both paid by businesses.

Tax revenue would help pay for maintenance of parks, streets, sidewalks and the city pier, as well as economic development and the cost of regulating marijuana businesses, three council members said in the ballot argument for the measure.

Proposition 64 includes two taxes: a 15 percent sales tax paid by cannabis consumers, and cultivation taxes of $9.25 per dry weight ounce of flowers and $2.75 per dry weight ounce of leaves paid by growers.

It also allows cities and counties to assess taxes.

Voters in 32 cities and nine counties, including Humboldt, Santa Cruz and Monterey counties also will consider marijuana measures on the November ballot, most of them setting taxes, according to the California Cannabis Coalition.

Another 23 cities, including Los Angeles, Sacramento, Oakland, Berkeley and Richmond, already have enacted marijuana taxes, according to California NORML.

You can reach Staff Writer Guy Kovner at 707-521-5457 or On Twitter @guykovner.

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