Cannabis helping Humboldt’s bottom line

Daniel Mintz
Mad River Union

HUMBOLDT – Humboldt County’s budget is in the black and with $17.7 million in cannabis excise tax revenue expected for the fiscal year, the county is pursuing a cannabis marketing program and a grant program to help communities that have been negatively impacted by legalization.

The county’s favorable budget scenario and the contribution of the cannabis tax were outlined as the Board of Supervisors fielded a first quarter budget update at their November 13 meeting.

Supervisors approved a variety of staff-recommended budget adjustments and also directed staff to determine the costs of the proposed cannabis-related programs.

General Fund revenues exceeded expenses by $7.2 million last year, resulting in a year-end fund balance of $19.8 million. That’s largely due to departmental and other savings, including $3 million in reduced costs of the Sheriff’s Office and the county jail due to staffing vacancies.

And although sales tax revenue is down by 8 percent compared to this time last year, Measure S cannabis tax revenue is robust.

During a public comment session, Terra Carver of the Humboldt Growers Alliance noted the “impressive” financial contribution of Measure S and the industry in general. But she also agreed with staff advice to consider the sustainability of the revenue.

“The cannabis industry across the whole state is under immense pressure as this newly-regulated industry gets its bearings,” she said. “Over-taxation from the state, per Prop. 64, along with the extremely high cost of entry combined with an emerging consumer experience is causing considerable anxiety among businesses.”

Carver added that Humboldt can “differentiate itself in the marketplace” through the development of an “influential collective marketing strategy that will in turn support economic development in the county.”

But when Carver finished her comments, McKinleyville resident Louis DeMartin said, “I’m against everything she’s for – there are some of us who don’t want our grandchildren to be dope-heads.”

Later, Supervisor Rex Bohn responded to the anti-cannabis sentiment.

“Louie, I understand 100 percent what you’re saying but it’s here, it’s a $17.7 million tax item and I’ve read three books on prohibition and this is no different than prohibition,” Bohn said. “The temperance leagues didn’t like it when it got legalized.”

Supervisor Estelle Fennell said that Carver “has a very good point about the sustainability of this potential income.”

She asked that staff be asked to develop a “marketing and branding strategy” to further advance the county’s cannabis economy.

Fennell is pleased that over $2 million of Measure S revenue is being invested in an effort to develop a campus of county offices in Garberville but Board Chair Ryan Sundberg said “most people haven’t seen the benefits of (the tax) come back into their communities” to address “quality of life” concerns.

He said an upgrade of School Road in McKinleyville included installation of medians that are “just grass and weeds and dirt” along with “meandering” sidewalk segments interrupted by areas of waist-high grass.

“I would love to see some of these main arteries have some kind of landscaping and maintenance, and to beautify some of these areas,” Sundberg continued. “I think that Measure S could provide that and let the community know that ‘you have a dispensary in your town and you’ve got grows, and here’s the benefits that come back to your community.’”

Sundberg also mentioned landscaping on Central Avenue and the installation of speed humps at Hiller Park as worthy Measure S funding items

.Public Works Director Tom Mattson said he’d want to coordinate with the McKinleyville Community Services District, which funds landscaping maintenance through an assessment district.

Sundberg recommended interfacing with the McKinleyville Citizens  Advisory Committee as well. Later, he added, “Now we have some money so I hope we can make an impact.”

Bohn suggested that road repairs are more important, saying, “We need roads that are drivable – they don’t care what the hell they look like.” But he also said that the collaboration with the McKinleyville agencies will yield results.

When Sundberg said he’d like to “see something get earmarked” due to his term ending in January,  Bohn told him, “I will personally make sure Sundberg Square gets taken care of.”

Supervisors approved spending $522,700 of leftover Measure Z public safety tax revenue for road maintenance and improvement. The money was proposed to be split between roads and a contribution to a $4.4 million sheriff’s and emergency services radio infrastructure upgrade.

But supervisors – and Sheriff Billy Honsal – agreed that Measure Z contributions to the project can be made later in the fiscal year as further savings emerge.

Supervisors approved the revenue-enabled budget spending, which includes millions of dollars for ADA facility upgrades, various capital improvements, $2.8 million for the emergency services radio project and a $1.2 million contribution to offset the county’s pension liability.

Also approved was the direction to staff on development of cannabis marketing and the community assistance grant program.


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