On March 7, 2017, voters in the County of Sonoma were tasked with deciding whether to authorize the county to impose taxes on commercial marijuana operations in unincorporated areas of the County. Specifically, Measure A asked voters:
Shall an ordinance be adopted imposing a cannabis business tax in unincorporated Sonoma County on cultivation up to $38 per square foot (annually adjusted by CPI increases) or 10% on gross receipts, and on other cannabis businesses up to 10% on gross receipts, to fund essential county services such as addressing industry impacts, public safety, fire, health, housing, roads, and environmental protection, with funds staying local and subject to audits, generating undetermined revenue until repealed?
With over 75,000 votes in, Measure A passed by an impressive 72% to 28% margin. As a result, more than $6 million per year is expected to be generated for the County at initial proposed rates on the more than 2,000 marijuana cultivators and dispensaries believed to be covered by the voter initiative.
The cannabis business tax – which is a general tax – provides the County with flexibility as to its use vis-a-vis expenditures. The County will be able to allocate and adjust funding among essential services in order to address the needs of the community. This would include additional funding to Code Enforcement, Public Safety, Roads Repair and Improvements, Health and Human Services, and Environmental Protection and Clean Up. That being said, a county staff report estimated the cost of adding staff members to multiple departments merely to enforce the new line of business at $3.9 million to $5.7 million. The County believes that the Measure A taxes will need to be supplemented by the permit fees to pay for this increase.
This revenue-production is set to be introduced at the same time the County is providing its cultivators to apply for permits to legalize their operations. The Cannabis Land Use Ordinance – adopted December 20, 2016 – provided a "transition period" mechanism for cannabis cultivation cooperaties or collective in operation before January 1, 2016 to come into compliance by January 1, 2018. About 791 licenses are expected to be sought during this transition period.
Next Steps
Sonoma County is planing to accept permit applications begining July 1 from growers and other businesses enabling them to have first-in-line position once the statewide regulations are released.
Furthermore, there is still a big unknown as to how Measure A will apply – if at all – to recreational marijuana. The County does not have any laws regarding nonmedical cannabis businesses and thus they are not currently allowed.
Unincorporated
However, this process is only for the unincorporated areas of the County of Sonoma. This does not cover incorporated areas – such as the Cities of Cloverdale, Cotati, Healdsburg, Petaluma, Rohnert Park, Santa Rosa, Sebastopol, and Sonoma, as well as the Town of Windsor. Each of these municipalities have their own ordinances and permits on medical cannabis, its cultivation and sale. Many are in a state of flux given the passage of Proposition 64. However, if you are within those municipalities, you will need to review those independent ordinances to determine what you can and cannot do.