By the end of the year, the green revolution will be much greener. Voters in at least 10 states will be making a decision on cannabis initiatives in November elections in a wave of dank democracy that crosses the country from Florida to North Dakota, Maine to Arizona. The big fish is California. The seventh-largest economy in the world will vote on the Adult Use of Marijuana Act, AKA AUMA or better known as Prop 64.
If passed Prop 64, AUMA will allow adults to have up to one ounce of marijuana and grow up to six plants; it will start a regulate-and-tax plan for the sale of marijuana and decrease many of the current marijuana-related felonies to misdemeanors.
“Things are very fluid right now,” stated Mark Putney of Second Sun, a cannabis production, and management company.
Cathedral City in Riverside County is offering a big $25 tax per square foot of cultivated marijuana, along with another $1 per gram levy on concentrates, and on every unit of cannabis infusion produced. In Fresno County, Coalinga will be enforcing the same $25/foot tax on the first 3000 acres cultivated marijuana, with “Only” $10 taxed on each additional square foot.
Monterey County will be voting on whether to tax farms $15 per square foot, a rate that would automatically jump to $20 in 2020 and $25 in 2021. The Desert Sun reported the tax could add $4 million to its current $22 million budget.
Speaking of $22 million, that just so happens to be the amount of tax money that San Diego expects to make in just the first year of the coming green rush. The plan is to tax five percent of gross receipts in four quarters, then spike it up to eight percent the second year and give the City Council the option to hike it to 15 percent in the future.
What does the massive tax proposals forecast for growers? “One of the fears we have is that a lot of these expenses will bump out small farmers, and that will have an impact on quality,” Stephen Gieder, CEO of cannabis consultancy Green Humboldt, stated.
A recent state commission report chaired by pro-AUMA Lt. Governor Gavin Newsom-recommends that tax policies are periodically adjusted as needed, but not with all the focus on maximizing revenue.
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