A Salinas Valley cannabis grower is spearheading an effort to repeal a 2018 tax, saying it is burdensome to a struggling industry already hammered by excessive fees.
That tax supports operations of the Monterey County Regional Fire District, with its chief saying the revenue is crucial for its work.
The 2018 voter-approved Measure H adds a tax on cannabis facilities based on their square footage. Currently, those rates are $0.21 per square foot for cultivators, $0.12 for nurseries and $1.19 for dispensaries and manufacturers.
According to Michelle Hackett Williamson, president of Riverview Farms in Salinas, that amounted to nearly $64,000 for the previous fiscal year for her family’s business.
MCRFD Chief David Sargenti says the smallest operator pays around $2,700 in the tax annually.
Over the years, the County of Monterey slashed its cultivation tax from $15-per-square-foot to under $2-per-square foot, while the state eliminated its cultivation tax. But the fire district’s tax still stands.
Riverview Farms is leading an initiative to repeal the tax, with the hopes of gathering enough signatures to qualify for a measure on the November ballot.
The proponents filed a notice to begin circulating the petition on Feb. 26. The group has 180 days to gather 841 qualified signatures of voters residing within the fire district’s boundaries.
Williamson is quick to note that the goal of the petition is not to hurt the fire department, but rather to level the playing field for cannabis businesses.
For the current fiscal year, the district expects to collect $375,000 from the tax.
“The loss of these taxes would cause critical impacts to our ability to support and respond to the cannabis industry needs,” Sargenti says, adding that an election would cost the district $180,000-$260,000. “These are very significant losses of revenue for our fire district that is already struggling with engine company staffing below that of our neighboring agencies and industry standards.”
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If the District had lowered the tax like the County did, once the reality became evident that the industry was struggling, there would not be any measure on the ballot. They were asked and they said they could not. Whether intentional or by poor planning, they put a measure on the ballot that does not allow the tax to ever be lowered and requires it to go up with inflation. Only the voters can fix it. The District could have put a corrected measure on the ballot for the voters to consider but they did not.
As the CEO of an ag supply business, I’d like to add that by our estimate, licensed cannabis operators have invested over $1 billion in the county. This includes rebuilding abandoned greenhouses and warehouses, installing fencing and security systems, fire suppression systems, buying forklifts and cargo vans, soil and fertilizers, and more. Over $70 million has been collected by the county in cultivation tax -- plus sales taxes, property taxes, employment taxes, building permits, and all other taxes paid by these businesses as any other. Time for the special "cannabis fire tax" to go!
Please support this measure to give much-needed relief to our emerging green industry who have invested so much to operate here.
What is failed to mention in this article. Monterey County Regional Fire has always received a portion of the property tax from the farm property owners for fire protection of these properties. The farms that chose to grow cannabis. Have had an increase in property tax as high as 800 percent for the improvements to cultivate cannabis. These improvements included fire sprinkler systems for processing rooms fire hydrants. Water storage tanks. High volume fire pressure pumps. Whether we grow roses or carnations or cannabis on these farms. It is Still agriculture. This industry has been taxed to death! there are only a small handful of farms left. Providing hundreds of year round jobs. primarily locally owned and operated.. This tax is on top of property tax. On top of cultivation tax. On top of all the improvements for Fire Protection. No other agriculture product Pays this additional tax. Monterey County Regional Fire is the only district to apply this additional tax in the state of California.
This tax was set when people thought that the cannabis industry would be the cash cow and the golden goose combined. But they killed the goose with over taxation and half the businesses have failed. The rest are struggling. They wrote this tax so that it could never go down and they keep increasing it while the County has reduced by 90%. Only the Voters can fix this now. MCFRD was paid for the heavy work of overseeing fire sprinkler systems costing hundreds of thousands of dollars. Now that they are up to code They should just need to visit once a year. That should not cost $65,000.
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