Cannabis businesses ask Sonoma County for more time to enter regulated market

Sonoma County tried to coax cannabis operators into stepping forward early and applying for local permission to do business with the promise of reduced land-use fines.

But with the Aug. 31 deadline to avoid those costly penalties just one week away, the county has received a paltry number of applications from cannabis businesses seeking to legitimize their operations. Since July, 21 cannabis cultivators have applied to do business in Sonoma County, a number dwarfed by the estimated 5,000 marijuana farmers already operating.

“It’s a trickle when we were expecting an avalanche,” Sonoma County Supervisor Lynda Hopkins said. “We want people out of the shadows and into a regulated market, so I absolutely support extending the penalty relief program.”

The county interest is also overshadowed by the thousands of cannabis farmers who have applied to do business across California’s Emerald Triangle marijuana growing region, where upwards of 3,000 cannabis farmers have stepped forward to do business in Mendocino, Humboldt and Trinity counties.

Sonoma County began accepting applications from cannabis businesses on July 5, and from the first day the interest wasn’t as much as predicted.

But county officials said they expected a rush of applications to come before the Aug. 31 deadline, the last day existing operators can avoid paying certain penalties. There’s no deadline to apply for a permit, which must be renewed each year, but a local permit in hand will give operators an advantage next year when the state begins issuing cannabis business licenses.

The state has said it will give priority to those who already have acquired a local permit to do business.

Also at stake is the business tax revenue the county is projected to receive from cannabis operators. County staff estimated that $3.8?million in tax revenue could come in from cannabis businesses by June 2018.

Industry leaders are urging the county to extend the deadline, and about a half-dozen people at Tuesday’s Board of Supervisors meeting urged the board to extend the Aug. 31 deadline as well.

“It’s the most urgent matter I’ve seen before the Board of Supervisors,” said Craig Litwin, a former mayor of Sebastopol and cannabis industry consultant. “The financial implications are severe for the farmers.”

Billed as an incentive program, Sonoma County’s temporary penalty relief program, in effect until the Aug. 31 deadline, works by removing certain fines for land-use violations that apply to any cannabis business already in operation.

At a minimum, the penalty fees could triple the cost of getting a permit, and at most they could multiply the cost by ten times, according to permit department staff.

The basic fee to apply for a permit is between $2,000 and $13,000, depending on the project’s size and scope.

One of the biggest hurdles for applicants is the number of supplementary reports they must acquire from consultants, from hazardous materials and energy use plans to groundwater and air quality studies.

Tawnie Logan, chairwoman of the board for the Sonoma County Growers Alliance, said she knows about 30 entities that hoped to make the Aug. 31 deadline but will be unable to pull together the variety of reports required in time.

“The county is about to close the door on hundreds of would-be licensed tax-paying cannabis businesses for an arbitrary deadline set last year,” Logan said. “That (deadline) gave them eight months to meet the single most stringent set of standards ever given to any agricultural business.”

The pressure has extended beyond the cannabis industry to the ancillary businesses serving the industry.

A local biological consultant, Darren Wiemeyer, spoke before the Board of Supervisors on Tuesday, among others asking for a deadline extension, noting he and other consultants are under “extreme pressure.”

“I’m here first-hand to let you know how much pressure companies like myself are under to get these reports completed,” Wiemeyer said. “Personally, what I’m seeing from small cultivators, they’re very behind the eight ball on this and not ready to submit.”

The board didn’t discuss the issue but listened as about a half-dozen people urged them to extend the deadline.

“I am one of the faces of the families who have not been able to submit my permit yet,” said a woman identified as Kelly Thompson. “Through extreme financial, human resource and time duress, I’m not there, and I’m not going to make it in ten days.”

The Aug. 31 deadline will pass before the board can take up the issue. The next time they can get the matter on the agenda is Sept. 12.

Hopkins said the board can decide the issue in September and make it retroactively apply to permits submitted in the interim, and she plans to recommend they do so. Hopkins and Supervisor Susan Gorin comprise the board’s ad hoc group making policy recommendations on the county’s cannabis program.

Sonoma County Supervisor Shirlee Zane, board chairwoman, signaled she would be willing to discuss the issue.

“We did not put all that staff energy into a permitting process for it to hit a wall, and the numbers have got to get better and I definitely want everyone in compliance,” Zane said.

You can reach Staff Writer Julie Johnson at 707-521-5220 or julie.johnson@pressdemocrat.com. On Twitter @jjpressdem.