The Governor’s Office this week released a revised 2022-23 state budget proposal, jiggering numerous line item estimates from the original January budget.
One of the areas Gov. Gavin Newsom looked at in the so-called “May Revise” was how to “create a safe, sustainable, and equitable legal cannabis market.”
Good luck on that effort, Gav, since the ill-begotten “Great Experiment In Legalizing Pot” lies in smoking ruins all around us, most noticeably at Ground Zero, aka Mendocino County.
I’ve been working with various consultants hired by the handful of growers who decided five years ago they were going legit by signing up with the County’s weed program, but have been stalled and thwarted by the unworkable, confusing, and convoluted local regulatory framework.
These consultants are doing their best to move their grower clients into compliance with the Weed Ordinance From Hell, but are up against almost impossible odds to do so.
One of the consultants called me to complain about the weed bureaucrats down in the county seat who “aren’t being very helpful” in transitioning her clients into legal status.
She said, “We (various consulting firms) thought because Mendocino County was recognized as the cannabis capitol of the world, that you’d have a model program here. But it’s actually probably the worst place; it’s really a mess.”
“Those are the very same words I’ve used to describe what’s happened here,” I told her.
Anyway, back to Newsom who promised several months ago that he would help simplify the tax structure by moving forward a proposal that, if approved by the Legislature, would remove unnecessary administrative burdens and costs, temporarily reduce the tax rate to support shifting consumers to the legal market, and stabilize the cannabis market.
A statement released by Newsom’s office said, “We have heard from many of you who have said that the current cannabis tax framework is overly complex. We know that current tax policies disproportionately burden cannabis farmers and small businesses and create instability throughout the supply chain, ultimately undermining the societal benefits of a taxed and regulated market. The May Revision proposes statutory changes to reform cannabis taxes and help reduce burdens for legal operators. Some changes include:
• Setting the cultivation tax rate at zero beginning July 1, 2022.
• Setting Allocation 3 funding for youth education/intervention/treatment, environmental restoration, and state and local law enforcement programs at a baseline of $670 million annually for three years. Up to $150 million one-time General Fund is available as needed through 2025-26 to backfill Allocation 3 funding, along with the authority to increase the excise tax rate through 2024-25 if tax revenues fall below the baseline for Allocation 3.
• Strengthening tax enforcement policies to increase tax compliance and collection and reduce unfair competition.
The statement concludes with, “The budget proposal includes a one-time allocation of $20.5 million to help expand access to legal retail throughout California. The grant program will assist cities and counties that do not currently license storefront or delivery-only cannabis retailers. If approved, the funds will aid localities with the development and implementation of local retail licensing programs and helping more of California’s existing consumers gain access to regulated and tested products through licensed and legal retailers.”
My final comment: Nothing the state or county can do at this time, or any time, will solve this mess of all messes.
(Jim Shields is the Mendocino County Observer’s editor and publisher, email@example.com, the long-time district manager of the Laytonville County Water District, and is also chairman of the Laytonville Area Municipal Advisory Council. Listen to his radio program “This and That” every Saturday at 12 noon on KPFN 105.1 FM, also streamed live: http://www.kpfn.org.)