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New Cannabis Tax Rates

Several interesting topics have been on the forefront in the Monterey County cannabis world the last few weeks. A great triumph for the industry was that the Board of Supervisors reduced the cannabis taxes. The local tax rate in the unincorporated areas of Monterey County are now as follows:

Cultivation: $5.00 per square foot

Nursery: $1.00 per square foot

Distribution: 4% gross receipts

Retail: 4% gross receipts

Testing: 1% gross receipts


Also receiving much attention is outdoor cultivation. The Board of Supervisors will be addressing the issue in July and will be giving direction to RMA staff as to where they would like the issue to go. It is important for all interested to attend the meeting and make your voice heard.


The State Water Board has informed the County that they will start enforcement actions against all properties that are currently in operation and are not permitted. This means that property owners need to move quickly on completing the steps necessary to submit an application to the State for a public water system. This only applies to farms operating with over 25 employees and will have more than 25 people on site for more than 60 days out of the year. However, if you are operating with less than 25 employees and you have more than 2 connections you are classified as a small water system and you must apply for a water system permit at the County level. Failure to complete these requirements will take away an operators’ “good standing” status from the County, which may result in not being able to operate through the licensing period.


Last week the County began enforcement actions. The focused areas were outdoor cultivation in South County and the greenhouse properties in the Alisal/Fuji Lane area. While the Monterey County Sheriffs Office was present with search warrants in South County, RMA and code enforcement walked the greenhouses to audit the canopy amounts to ensure there was accurate tax reporting. It has been reported that RMA will conduct similar audits every month.


The fourth quarter cannabis tax ends June 30, 2018. Please note a new reporting form will be due sometime in July.



Jennifer Rosenthal is a local cannabis and criminal defense attorney. The views and opinions expressed in this article are those of the author and does not reflect an official position of the Association.


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