How did we end up with a 45% cannabis tax break??

SPECIAL TAX BREAKS ALL AROUND FOR THE CANNABIS INDUSTRY!

On March 15th, the Sonoma County Board of Supervisors (BOS) approved a 45% tax reduction for cannabis operations in unincorporated areas.  County staff had proposed a 10% reduction to ensure taxes received covered the cost of managing the cannabis program; however, this was single handedly overruled by Supervisor James Gore who increased it to a 45% reduction after admitting he didn’t have any validated facts to base a decision on. (“numbers coming at us as anecdotes,” Gore said. “And we don’t have any validation from our staff”)

The tax reduction is retroactive to July 2021, the annual reduction estimated at $800K, which must now be made up by other taxpayers or other program cuts.  Measure A, which allowed for commercial cannabis in Sonoma County, was sold to the voters with the promise “...to fund essential county services such as addressing industry impacts, public safety, fire, health, housing, roads, and environmental protection...". This promise was not honored by our BOS.

On March 23rd Cloverdale City Council approved a 78% tax reductions for cannabis manufacturing in their City limits.   This proposed reduction was brought to the Council by Erin Gore, founder and CEO of Cloverdale-based microbusiness Garden Society.  Erin Gore is the sister-in-law of County Supervisor James Gore.  It should be noted Erin Gore's business is of a manufacturing nature, such that the drop in wholesale prices from the growers likely benefits her business.  Why she should receive a secondary benefit through a tax reduction is troublesome.  The net result is $200K less to fund essential services.

Let’s be clear, the cannabis industry’s problem is not taxation. The industry claims the recent drop in prices makes their taxes unaffordable.   In reality, their problem is not a tax problem but a supply-demand problem.  By the industry’s own admission, cannabis operators are a victim of their own success.  2020 was bumper year, prices up, sales up - not a peep about taxes.   For 2021 they increased production, far exceeding what the market could absorb which drove down the cannabis prices to a point they feel taxes are too high now.  This tax relief given will not solve their competitive position; it only deprives Sonoma County residences of funding for the essential services promised, while we continue to shoulder the full cost of impacts.

Given no other industry gets a tax cut when their prices or revenue falls due to overproduction, we’re beyond dismayed at the favoritism this shows from our supervisors and city officials.  Further the apparent conflict of interest is very problematic.