This week (August 27th) the El Dorado County Cannabis Ad-Hoc Committee presented it’s recommendations, for tax rates and the language for nurseries, manufacturing, and testing laboratories, before the Board of Supervisors. Below is a summary of that information:
The overall presentation was split into several agenda items and the first item addressed fees. Unfortunately, due to a “notice” issue, the discussion on fees was moved to September 10, 2019. The time was not given but there were assurances that everyone would be notified in a timely manner. If you did not attend the last Ad-hoc Committee Meeting, the proposed fees are as follows:
Conditional Use Permit: $9,500
Annual Business Operating Permit: $7,000
County Monitoring Program (annual): $4,550
Annual Business Operating Permit Renewal: $4,800
It is important to note that during the presentation, on August 27th, there were statements made indicating that those recommended fees may change before the September 10th presentation. However, no specifics were given as to those changes.
Taxes & Location of Cannabis Program
The next agenda item covered the proposed taxes and a discussion of where the cannabis program should be placed within the governmental agency of El Dorado County. The recommendation for taxes are as follows:
Outdoor Cultivation - $2 per square foot
Mixed-Light Cultivation - $4 per square foot
Indoor Cultivation - $7 per square foot
Nursery - 4% gross receipts
Manufacturing - 2.5% gross receipts
Retail - 4% gross receipts
Distribution - 2% gross receipts
Testing Labs - .5% gross receipts
Ultimately, after much discussion, the Board voted to approve the recommendations of the above tax rates.
In addition to the tax discussion, there was much discussion around where the cannabis program would be located and ran from. The truth is that the commercial cannabis program will be very new and different, for the County, and it does not efficiently fit into any of the currently existing departments. However, whether the County likes it or not, it is here to stay and it will need to be run from somewhere. Ultimately, the Minutes reflect the following:
“The program is to be located in the Planning and Building Department with management assistance from the Deputy Chief Administrative Officer from Chief Administrative Officer's office.”
First Reading of Commercial Cannabis Ordinance
The last agenda item had three basic objectives:
Find that the adoption of the proposed amendments to Measure N (taxes) are not subject to CEQA.
Approve the first reading of the El Dorado County Ordinance Code entitled “Taxation of Commercial Cannabis Activities”
Waive full reading of the Ordinance, read by title only and continue this matter to September 10, 2019 for Final Passage (Second Reading)
Ultimately, all of those objectives were met and, as noted in the Minutes from the meeting:
“Continue the adoption of Ordinance 5107 to September 10, 2019 for Final Passage (Second Reading) with the addition of "establish shorter for any commercial cannabis activity and longer for commercial cannabis cultivation report and payment periods"
Just to clarify, the above "establish shorter for any commercial cannabis activity and longer for commercial cannabis cultivation report and payment periods" refers to when businesses will be asked to pay taxes. In essence, it was acknowledged that the tax collector is attempting to address the issue of collecting taxes, in cash, and she asked that a minimum of quarterly or, in some cases, monthly tax payments be made so that smaller quantities of cash are coming to her office. Additionally, it was recognized, and discussed, that cultivators will face a different issue, with taxes, as they will not be paid, and therefore a taxable event will not occur, until after they harvest their crops and asking the cultivator to pay taxes before their crop has been harvested would not work. Therefore, cultivator’s taxes will be pushed until the end of the year to allow all cultivators to sell their harvest before taxes would be due.
After this week’s meeting here is what we know:
9/10/19 - We are going back before the Board of Supervisors for the 2nd reading of the Ordinance.
September - We do not have an official date yet but the Ad-hoc Committee will be coming back together to discuss the basic process for submitting applications to the County
September - No official date yet but coming back together to discuss new staff recommendations for the program and the RFP’s
September 30, 2019 - Based on the information coming from the County, it appears that the date for the applications to be made available has not changed.
As a reminder, if you are getting prepared to submit your application to the County, you should be working on the following:
Your Business Structure
Live Scans (for all investors, partners, managers, spouses and significant others)
Property & Premise Diagrams
Overall Operating Procedures
The following resources might be helpful to you:
Information for cultivators:
Law Office of Dale Schafer - (916) 740-2141 or email@example.com
Elder Accountancy - (916) 972-8297 or firstname.lastname@example.org
Jon Westphal - 530-677-9840 or email@example.com
Carroll Security Consulting - (916) 997-7329 or https://carrollsecurityconsulting.com/