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Food and Agriculture

Trinity County Cannabis Tax Would Reward Small Producers

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Esteban Lopez
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A proposed cannabis tax in Trinity County, California would encourage small cannabis growing operations by taxing them at a lower rate than large producers. It’s an effort to promote environmentally-friendly operations and bring in money for the county.

This fall, voters will be asked to decide on the Trinity County Commercial Cannabis Tax. The proposal would be the county’s first local cannabis tax, in addition to California’s state cultivation tax.

The county proposal would apply a lower tax rate to smaller producers than large growers, based on the number of pounds of cannabis that are produced.

“It’s intended to give the small guys, essentially, a leg up on taxes. It’s the same language, or similar language, to the craft beer tax regulations in California,” says Adrien Keys, a licensed cannabis cultivator and board president of the Trinity County Agriculture Alliance, the group that proposed the tax petition.

Keys says the tax scheme is meant to incentivize environmentally-friendly growing practices rather than heavy pesticide and fertilizer use to maximize plant yields.

Growers’ tax rates would increase as the number of pounds of cannabis they produce crosses a series of thresholds – from 1-100 lbs., 100-400 lbs., 400-1,000 lbs., and over 1,000 lbs. Those rates would also vary depending on whether cannabis flowers, leaves or overall plants are being taxed.

“I do think as a tax model, some sort of tiered model is probably the most appropriate, if we’re going to have production taxes,” says Kristin Nevedal, the board chair of the International Cannabis Farmers Association.

Nevedal says taxes on cannabis in California can be as much as 30-60% the price of the actual cannabis products.

“I don’t know if I hope it fails or if it wins,” she says of the Trinity proposal.

The proposed tax would offer a boost for a rural county affected by the pandemic. Keys says his 10,000 square foot farm would generate between $3,000 and $5,000 in annual taxes. And while an official economic impact study has not been done, he estimates the tax would bring in around $3 million per year for the county’s general fund.

After getting 1,260 petition signatures in five days, Keys says the proposal has wide community support.

“We got support from business owners, we got support from local churches, we got support from non-growers and growers alike who just want to see our industry stabilize and become successful and have a long-term benefit.”