- Posted by Erica Treeby
- On October 11, 2016
- breaking, cannabis, commercial cultivation, commercial medical cannabis, MCRSA, Medical Marijuana, ordinances, permit, taxes
With the deadline looming to place the proposed marijuana business tax on the ballot this Fall, Monterey County’s Board of Supervisors rushed to approve an ordinance imposing a general tax on all commercial cannabis activities within the unincorporated area of the county. Monterey County residents will have the chance to cast their vote on the tax in the November 8th general election.
On July 12th and 19th, the Board of Supervisors adopted new ordinances (amended Chapters 7.90 and 7.95 and Titles 20 and 21 of the Monterey County Code) regulating local medical marijuana activities such as personal and commercial cultivation, retail sales, manufacturing and distribution; however, the proposed laws will not become operative unless the marijuana business tax measure is passed by a majority of voters at the November 8 election. If approved by the voters, the tax would be imposed starting January 1, 2017.
Measure Y, the proposed tax ordinance, would be phased in over a five-year period, and is a tax on the privilege to conduct a commercial business in the unincorporated areas of the County. The tax will likely be collected and tracked in connection with a business license. For marijuana retail sales activity, the tax would start at 5 percent of gross receipts for the year, and increase 2.5 percent annually beginning July 1, 2020, to a maximum rate of 10 percent. The tax rate for cultivation would start at $15 per square foot of canopy, and increase by $5 every year beginning July 1, 2020, to a maximum rate of $25 per square foot. Nursery cultivation would be taxed at $2 per square foot of canopy, up to a maximum of $5 per square foot of canopy. Once the maximum tax rate is reached, the tax on cultivation will be adjusted annually based on the consumer price index score for the San Francisco-Oakland-San Jose Area.
The County estimates that implementation of the local ordinances regulating medical cannabis activities will cost $3.5 million annually. The tax measure was proposed to offset this cost. Monterey claims that permit fees will raise only $650,000 per year.
On September 27th, the Board approved fee schedules establishing permit fees for personal and commercial medical cannabis permit applications. The Board’s resolution amended Articles IX (Resource Management Agency-Planning), XVII (County Counsel), and I.E (Health Department) of the Monterey County Fee Resolution. While the fee for personal cultivation is set at $170 annually, fees for commercial cultivation are, not surprisingly, much higher. Use Permits for commercial medical cannabis activities will run between $8,200 and $9,000 per application. The Commercial Medical Cannabis Permit, which is required under Chapter 7.90 of the Monterey County Code, will require a deposit amount of $4,474 along with an annual renewal fee of a little more than $1,000. However, if Measure Y does not pass in November, the ordinances adopted in July will not become operative, and fees for
commercial medical cannabis permits and personal medical cannabis permits would not be needed.