Sonoma County supervisors set special election for marijuana tax

Sonoma County supervisors on Tuesday voted to call a special election this March asking voters to impose new taxes on the cultivation and sale of marijuana which, if passed, is expected to provide the funding for implementation of broad and sweeping new regulations governing the county’s lucrative marijuana industry.

Supervisors called the election for March 7 to answer the question of whether or not to tax and regulate thousands of marijuana growers currently operating largely underground. The process, which some supervisors acknowledged was accelerated in the past year, sets the stage for what is emerging as one of the most significant land-use decisions in the county’s recent history.

“This is the first time we’ll bring the industry into the light and onto the books,” said Supervisor Efren Carrillo, the board chairman, referencing the need for a quick turnaround on county regulations to keep pace with new state laws that allow for the taxation of medical marijuana and recreational use.

“What is currently happening is not working,” Carrillo said. “It’s not working for rural residents, it’s not working for operators … and it’s not working for the county.”

County officials estimate the new taxes imposed on cultivation and sales would generate more than $6 million in the first year.

Initially, the proposed tax on indoor and outdoor cultivation would range from 50 cents per square foot to $18.75 per square foot. Taxes would also be levied on other marijuana businesses including dispensaries and distributors.

The success of the proposed tax measure, however, could rest on a disputed county proposal to allow commercial growing operations in rural residential neighborhoods.

At a five-hour public hearing Tuesday, marijuana industry representatives and growers said they want to come out of the shadows and into legal compliance, and are willing to tax themselves. But many speakers also voiced strong support for operating on rural lots totaling more than 2 acres in size, outside city limits.

“A balance can be struck between existing operations in rural residential areas,” said Tawnie Logan, executive director of the advocacy group Sonoma County Growers Alliance. “Those already in operation in those areas should be able to apply for a permit and prove they can be in compliance. An outright ban in rural residential neighborhoods will only further the black market. It’s classic prohibition.”

Rural residents, meanwhile, expressed concern with allowing growing operations in their neighborhoods, citing fears about increased crime and pungent odors, as well as growing operations draining groundwater and harming the peace and quiet of country neighborhoods.

“This would destroy our neighborhood,” said Joe Tembrock, who lives outside Santa Rosa. “Putting (cannabis growers) in a residential neighborhood isn’t safe for anyone.”

The fate of a future tax measure could rest in the hands of rural residents. There are 81,000 people who live on land designated for residential use in unincorporated areas outside city limits compared with an estimated 3,000 growers. Without permission to grow in rural residential areas, much of the industry could remain underground, some growers said.

“We are 100 percent in favor of regulating and permitting existing operators,” said David Scott, a rural marijuana grower. “All of the issues people are concerned about with cannabis cultivation could be immediately addressed with … regulations. One of the biggest benefits I see with regulations is the new relationship between the industry and law enforcement.”

Scott and others who identified themselves as growers said they would be more apt to bring concerns about crime and other issues if they knew they would not be penalized.

“Theft and violence are issues because operators don’t feel like they can call law enforcement,” he said.

Against a county staff recommendation, Supervisors James Gore and David Rabbitt expressed early support for an outright ban of commercial cultivation in rural residential zones. Supervisor Susan Gorin, however, cautioned the board to take more time and deliberate.

“We should not allow ourselves to be rushed,” Gorin said. “This is important to do and get it right.”

Gorin also expressed caution in putting the marijuana tax on the March ballot, referencing other failed tax measures by the board, including Measure A, which sought in 2015 to raise money to fund road repairs.

“How much of a campaign do we need to get up and running in order to message this?” she asked. “Based upon our experience, we should take our time and make sure we have messaging and a potential campaign lined up.”

If approved, tax revenue would be deposited into the county general fund and could be used to fund additional code enforcement officers to oversee new marijuana regulations as well as other county initiatives, officials said.

The special election would cost roughly $400,000.

Supervisors are set to continue discussion of land-use regulations governing marijuana cultivation and sales at its regular meeting Dec. 13.

The regulations include a proposed zoning ordinance that will determine where medical cannabis can be grown for profit. New rules could also set the regulatory framework for the county’s approach to marijuana cultivation under the recently voter-approved Proposition 64, which legalized adult recreational cannabis use.

The proposed land-use measure also allows residents to grow six plants or use up to 100 square feet per residence for personal consumption, essentially matching provisions of Proposition 64.