Mendocino County ballot proposal seen as marijuana industry’s bid to write rules

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Measure AF

The Mendocino Heritage Act of 2016 would regulate and tax commercial medical cannabis activity in unincorporated Mendocino County. It was drafted by members of the local cannabis industry. The 60-page measure establishes:
Permits for cultivation, manufacture, transportation, distribution, testing and dispensaries with no cap on the number of permits.
A two-year residency requirement for all permits.
A 2.5 percent annual tax on the gross receipts of medical cannabis businesses.
Setbacks for cultivation and other cannabis businesses of 30 feet from a neigh-boring property line, 100 feet from an adjacent residence and 600 feet of a school or park.
Amendments by the Board of Supervisors starting in June 2018.
Butane hash production in industrial zones under standards set by the county.
A civil enforcement procedure for permit violations, removing law enforcement action.

A move by Mendocino County’s marijuana industry to dramatically rewrite the rules for commercial cannabis has touched off a tense political battle in the heart of pot country, where thousands of citizens grow weed and local economies rely on the underground multimillion-dollar industry.

Signs for and against Mendocino’s Measure AF dot the bucolic landscape of the county at the south end of the Emerald Triangle, widely credited with growing 60 percent of the nation’s marijuana.

“It’s almost like who isn’t growing cannabis here,” said Laytonville resident Tim Blake, founder of the Emerald Cup marijuana fair and a member of the Yes on AF steering committee.

The measure, known as the Mendocino Heritage Act — written, financed and promoted by the county’s pot growers and dispensaries — represents the industry’s vision of government regulation, one that clashes with the county’s political establishment and local regulations under development.

The 60-page measure presents a “radically new approach to dealing with cannabis,” said Hezekiah Allen, executive director of the 700-member California Growers Association, the state’s largest cannabis trade group, which endorsed Measure AF along with two other pot industry groups.

That’s especially because the measure cuts law enforcement out of the regulatory picture and replaces it with civil oversight, including the assessment of penalties for cannabis businesses that violate the proposed licensing and zoning codes, as well as safety and environmental standards.

It may seem striking now, Allen said, “but a decade from now that is going to be the norm.”

Whether it wins or loses in the Nov. 8 election, the measure may “provide a template” for local regulations in California and beyond, said David McCuan, a Sonoma State University political scientist.

The cannabis industry is “becoming much more savvy than it was a few election cycles ago,” McCuan said.

Opposition to Measure AF

Lined up against Measure AF is a coalition of more than two dozen organizations, including the Board of Supervisors, Ukiah City Council and Ukiah Valley Democratic Club along with environmental, educational and public safety groups.

“The growers have over-reached,” said county Supervisor John McCowen, who co-signed a ballot argument against Measure AF.

The measure is “a test of how much we are willing to put up with in Mendocino County,” he said, acknowledging that it is a “very cannabis-tolerant community” with nearly 50,000 registered voters.

It took just 2,500 voters’ signatures to put Measure AF on the ballot. To become law it needs a majority vote from Mendocino’s ultra-liberal electorate, which favored Bernie Sanders by 2-to-1 over Hillary Clinton in the Democratic presidential primary vote in June.

“They are allowing thousands of new growers on thousands of cultivating sites,” McCowen said, noting that Measure AF allows 1-acre gardens on large parcels.

The county’s draft pot cultivation and zoning ordinance bans new growers until 2020 and limits large-lot gardens to 10,000 square feet. The ordinance could come to a vote by the Board of Supervisors in December or January, McCowen said, but if Measure AF is approved it would supplant all current and future marijuana regulations adopted by supervisors.

Mike Sweeney, coordinator of the No on AF campaign, said the ballot measure is a “hoax” because it has no enforcement teeth. County inspectors, rather than sheriff’s deputies, would be empowered to issue citations for permit violations with a $100 fine for the first offense. It would provide a 60-day period to resolve the violation and the opportunity for appeals to be decided by a hearing officer.

Measure AF

The Mendocino Heritage Act of 2016 would regulate and tax commercial medical cannabis activity in unincorporated Mendocino County. It was drafted by members of the local cannabis industry. The 60-page measure establishes:
Permits for cultivation, manufacture, transportation, distribution, testing and dispensaries with no cap on the number of permits.
A two-year residency requirement for all permits.
A 2.5 percent annual tax on the gross receipts of medical cannabis businesses.
Setbacks for cultivation and other cannabis businesses of 30 feet from a neigh-boring property line, 100 feet from an adjacent residence and 600 feet of a school or park.
Amendments by the Board of Supervisors starting in June 2018.
Butane hash production in industrial zones under standards set by the county.
A civil enforcement procedure for permit violations, removing law enforcement action.

“It’s a joke,” Sweeney said, contending that the appeals process would “tie the county in knots.”

Influence of cannabis interests

The ballot measure was crafted by cannabis interests “that see commercialization coming and want to increase the scope of their operations to be able to compete,” he said.

California lawmakers approved comprehensive medical marijuana regulations last year, and bureaucrats are rushing to establish the framework and issue licenses in 2018. If state voters approve adult recreational use on Nov. 8, that commercial licensing program would largely match the medical pot law — and both systems grant control over cannabis regulations to cities and counties.

Sarah Bodnar, the Yes on AF campaign manager, said the citizen-sponsored ballot measure was a response to the county’s failure to come up with timely cannabis regulations.

“Our cultivators want to play by the rules and pay taxes,” she said. “There’s no way to do lawful cannabis business in Mendocino County.”

Allen said the state growers association prefers to see local cannabis rules developed by county supervisors, rather than ballot measures, which he said can be expensive and politically divisive.

“Letting them (supervisors) do their job is the best way to get good policy,” he said.

But in Mendocino, “cannabis folks lost confidence in the county’s ability to provide the security they felt they needed,” Allen said.

Permits issued under Measure AF would give cannabis operators a year of security pending the start of state licensing in January 2018, he said.

Critics who consider Measure AF too permissive fail to understand that it rests on the foundation that cannabis was legally designated by the state as an agricultural product last year, putting marijuana under the jurisdiction of civil authorities “just like any other business,” Bodnar said.

Measure AF puts no caps on cannabis business permits and allows cultivation in all rural zones, but is in no way a “free pass” for the industry, she said. The measure requires that permit holders must have been county residents for two years and that all businesses must be 51 percent owned by a local person.

“There’s no way dispensaries are going to line the streets,” she said.

State and local agencies will regulate cannabis more closely than any other industry in California, Bodnar said. Local law enforcement will be left to focus on unlicensed trespass grows that proliferate in Mendocino County and do considerable damage to the environment, she said.

There are as many as 10,000 pot growers in Mendocino County, by some estimates. Allen puts it at 4,000 legitimate commercial growers, with more than half tending plots of 5,000 square feet or less.

Blake contended that some growers are moving from Mendocino to Humboldt County, where there are “more relaxed cultivation laws.” Pot businesses may also migrate to Sonoma County, which is moving forward on a medical marijuana zoning law, he said.

“Mendocino needs to embrace our heritage or we’re going to lose it,” Blake said.

Some leaders not on board

But leading interest groups and public and private figures in the county are not on board.

Jared Carter, a prominent Ukiah attorney, wrote a letter to the editor of the Ukiah newspaper stating that he will probably vote for recreational use of marijuana but that it would be “a serious mistake to lock into place the unsatisfactory, unbalanced set of rules the members of the marijuana industry have drafted into Measure AF.”

Two other issues in dispute are the ballot measure’s provisions that allow amendments by the Board of Supervisors starting in June 2018 and set a 2.5 percent annual tax on the gross receipts of marijuana businesses, which is not a sales tax paid by consumers.

Sweeney said he questions whether “meaningful amendments” could be made, given the condition they must further the “purpose and intent” of Measure AF, a fairly broad standard.

Shari Schapmire, the county tax collector, has said the language in AF is “absent of any taxing structure or enforcement language that would allow for the successful collection of taxes.”

Blake said he thought Schapmire’s assertion was debatable, and that supervisors could make any necessary amendments.

However, Schapmire said that a similar tax — approved by the Board of Supervisors and placed on the ballot as Measure AI — has no such defects. The tax, which requires voter approval, would allow the county to levy an annual tax on gross receipts from cannabis cultivation starting at 2.5 percent and not to exceed 10 percent.

Measure AJ, also put on the ballot by supervisors, is an advisory measure — not binding on the board — that directs proceeds from the Measure AI tax to be spent on enforcement of marijuana regulations, enhanced mental health services, county road repairs and increased fire and emergency services.

Point Arena, a small town on the Mendocino coast, also has a marijuana tax on the ballot, along with Cloverdale and Lake County.

Where the money is flowing

The No on AF campaign reported nearly $15,000 in contributions last week, including $5,000 from the Mendocino County Farm Bureau and $1,000 from Sweeney and from Ukiah businessman Ross Liberty.

The Yes on AF campaign had more than $61,000 in donations, including four-figure contributions from cannabis businesses, Bodnar said.

McCuan said it typically costs more to support a ballot measure than it does to defeat one, and that a broad coalition of opponents often thwarts a measure supported by a special interest group.

Despite their considerable financial advantage, Measure AF’s backers have “failed to generate any support outside of the cannabis community,” McCowen said.

Blake said that despite the high-stakes debate, close ties between cannabis figures like himself and public officials such as McCowen have not been ruptured.

“John and I are still treating each other decently,” he said. “We both know we’re going to have to work together after this is over and neither of us wants to ruin our friendship.”

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

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