Officials in Sonoma, Calif., moved this week to offer tax breaks to cannabis growers in the area. This is another decision driven by the ongoing economic struggles of the state’s legal marijuana industry.
North Bay Business Journal report The Sonoma County Board of Supervisors “voted 4-1 on Tuesday to change how taxes on cannabis cultivation are set, lowering the amount some growers pay and making it for others.” “Cannabis growers within the county’s jurisdiction will be taxed based on the size of their business classified in three different ways, calculated based on a 2.5% gross income tax rate.”
Changes will take effect in July. Around journalSaid Cannabis Growers ‘Will Pay’ [a] $0.75 per square foot for outdoor work. $12.50 per square foot for indoor growing and $3 per square foot for mixed light growing that combines artificial and natural light. ”
This week’s vote comes nearly a year after the Sonoma County Board of Supervisors cut the cannabis cultivation tax by almost 50%.
Sonoma County Board of Supervisors Chairman James Gore said: high times Last March, he explained why he advocated a new tax adjustment.
“This tax cut is in line with the market impact that cannabis producers are currently facing due to the sharp drop in wholesale prices per pound,” Gore said at the time. “The reason this was justified, justified and warranted was that, like many other jurisdictions, cannabis taxes were based on coverage (square feet). Intended to be 1.5% of gross revenue. But if wholesale prices drop and you’re still taxing on a per-square-foot basis, the potential 3-5% is suddenly 15 or 20—but more.
Gore explained that the previous “tax system did not fit the scenario of what was happening.”
“It ended up being voted 5-0, but there was a lot of controversy in the debate. Some didn’t want the tax cut,” Gore said. “In the meantime, we plan to move to a total revenue model. That is the ultimate goal.”
“We were bankrupting people with our policies, so this is the right thing to do,” he continued. The revenue surplus from our cannabis program will support two years of operating costs as we transition to a new tax model and policy framework.We will get this problem right for Sonoma County. It means continuing to work with our neighbors and industry advocates, learning from other counties, and finding local solutions that are fair and sustainable for both our communities and the environment. To do.”
This week’s vote by the Board was in the same spirit. with north bay journal report The move comes “after months of intense pressure from cannabis industry representatives who complained that local and state tax tiers prevented them from doing business in California’s legalized market.” was broken
Growers and operators participating in nationally sanctioned programs are often plagued with onerous taxes and regulations, while consumers are increasingly turning to illegal markets for cheaper prices. The legal cannabis industry across the country is going through a difficult time because of
a investigation Last year, the National Cannabis Industry Association found that only 37% of cannabis businesses nationwide were profitable. In California, it was just 26%.