I was asked to speak last week at the Monterey County Business Council and address with the group the “future of the cannabis industry in Monterey County” and given the current state of the industry it was a bleak discussion at best.
If you are reading this you are fully aware of the dire situation commercial cannabis businesses across the state are facing. The entire industry has been hit hard but it appears the most significantly affected are the growers and most particularly growers that sell their product in bulk – which is what makes up a majority of the state licenses held in the Salinas Valley.
The time for relief is now. July 31st marked the deadline for quarter 3 and 4 commercial cannabis tax payments and most companies do not have the funds needed to pay their payment in full. If operators do not pay their taxes they are considered to be out of good standing and could potentially, under the local regulatory scheme, be shut down, forced to destroy their product and not permitted to grow or sell regulated cannabis.
If businesses are forced to close their doors, where does that leave Monterey County for the future of cannabis? Due to both the local and state regulations, new businesses will not be able to start operations without a state license and three local permits/ licenses. Local licenses cannot be achieved without the property being entitled and all conditions of project approval met. The cost of capital improvements that are required for land entitlements coupled with the cost of traffic mitigation fees could be upwards of half a million dollars for a given site in Salinas. The projects required by the County for use permits could also take a minimum of one to two years to complete, making it highly unlikely for any new business to be legally operational before two years.
So what do we do? We need to do everything possible to help those companies that are currently active in our County. These companies have paid over $60 million dollars in cannabis taxes since 2017 – we want these businesses to grow, be successful and maintain business locally. The number of jobs they create not only on their farms but in the ancillary businesses that are also utilized by these operations trickles down throughout all avenues of our local workforce and economy. The losses will be catastrophic.
It is imperative for all interested parties to address the Board of Supervisors at their next meeting on July 26, 2022. Tax relief by the Board is a must and is the only way these companies will survive.
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.