By Jondi Gumz
Samuel LoForti, Santa Cruz County’s cannabis licensing manager since December 2018, announces a series of four cannabis policy listening sessions, starting in Aptos March 18.
Cannabis Licensing has operated in the red for two years, with expenses exceeding revenues by $250,000 to $625,000 each year and a $700,000 deficit projected for this year.
Elected officials had hoped taxes on cannabis after legalization on 2016 would provide a new infusion of revenue but sales have fallen from $17.4 million in 2021 to $15.6 million in 2023.
The same downward trend is seen in Santa Clara, Monterey and San Mateo counties.
The state’s licensed retailers reported $5.1 billion in taxable sales in 2023, down 4.7% from 2022, according to data from the California Department of Tax and Fee Administration.
This included pipes, rolling papers, grinders and T-shirts, along with actual cannabis products.
Actual cannabis sales in 2023, as reported by dispensaries totaled $4.4 billion – far shy of the assumed $6 billion market for the state.
Cannabis businesses have been hampered by federal law that for decades has categorized cannabis as an illegal drug, which could be addressed by the Secure and Fair Enforcement Regulation (SAFER) Banking Act (S. 2860), which would green light financial institutions to serve the cannabis industry.
Senate Minority Leader Chuck Schumer Schumer (D-Brooklyn) could call for a floor vote, but he hasn’t. According to a cannabis lobbyist, negotiations focus on the language about “safe banking” and a Obama era policy to investigate banks providing services to firearm dealers and payday lenders who were said to be at risk of money laundering.
According to MJBizDaily, some local elected officials in California are acknowledging a longtime industry grievance — legal companies’ taxes are too high — and cutting local levies on retail sales, business operations or both.
Hirsh Jain of Ananda Strategy, a Los Angeles consultant, reports 14 cities and counties– including San Francisco, and Humboldt, Monterey and San Luis Obispo counties — have reduced or eliminated local sales, business or cultivation taxes over the past year.
Cannabis sales in California require a 15% state excise tax as well as state sales taxes.
Santa Cruz County imposed a 7% tax on cannabis businesses, then dropped the tax for cannabis distributors in 2021.
However, the tax for cultivators and manufacturers has risen from 5% in 2018 to 6% in 2020 and 7% in 2023.
With five years’ experience under the same licensing manager, the Santa Cruz County Board of Supervisors directed the Cannabis Licensing Office to seek input from the public regarding policies related to:
- Sales
- Limited sales from cultivators directly to consumers
- Consumption • At existing retail businesses • At farms
- Cultivation • Changes to canopy limits (total area where cannabis can be grown on a parcel)
- Increases to cultivation limits • Within Greenhouses • Outdoors • Co-location
The Aptos session will be from 5:30 – 7 p.m. Monday, March 18, at Aptos Village Park, 100 Aptos Creek Road, and also via Zoom at https://us06web.zoom.us/j/83724157530
Other sessions will be:
- Tuesday March 19th at the Watsonville Community Room from 5:30 to 7:00 pm at 275 Main St., Watsonville, fourth floor.
- Wednesday March 20th at Highlands Park from 5:30 to 7:00 pm
- Wednesday March 27th at the Sheriff’s Office Community Room from 5:30 to 7:00 pm at 5200 Soquel Ave., Live Oak. n