Marijuana

Tuesday, April 9, 2024

County Preps Measure S Enforcement Action on Hundreds of Cannabis Farms

Posted By on Tue, Apr 9, 2024 at 6:49 PM

The Humboldt County Planning Department will soon be suspending the permits of hundreds of cannabis farmers who failed to enter into a payment agreement for owed Measure S taxes by the March 31 deadline, Planning Director John Ford told the Journal.

The Humboldt County Board of Supervisors voted in October to give cannabis farmers until March 31 to enter into payment plans for a total of $14.1 million in unpaid excise taxes, and until March 31, 2025 to pay their bills in full. Ford said his department is awaiting a list from the Humboldt County Treasurer-Tax Collector’s Office of farmers who have owed taxes but failed to enter into a payment plan.

According to Whitney Morgan, the county’s revenue and tax manager, 318 cannabis farmers have agreed to payment plans with the county that, if paid in full, would make good on a combined $4.2 million in taxes owed. But Morgan says farmers associated with another 401 accounts with balances due totaling $6.1 million failed to reach payment plans with the county by the deadline.

The numbers Morgan provided total $10.3 million — $3.8 million less than the amount staff said was owed in Measure S taxes back in October. Morgan says $2.8 million of that was deemed “uncollectable” by planning staff due to permits being “approved or withdrawn before cultivation,” while it was also discovered some accounts had been over billed due to misclassifications. Some accounts were also simply paid in full, she said.

Those who failed to enter a payment plan will have their permits suspended for 90 days, Ford said. Farmers can then use those 90 days to enter into a payment plan and pay “what should have been paid within the first 90 days,” in which case the suspension will be lifted, Ford said. Those who fail to enter a payment plan and come current on it within 90 days will see their permits scheduled for revocation, he said.

Ford said he expected the notices of suspension to be mailed out by the end of this week.

Passed by voters in 2016, Measure S imposes taxes on farms of up to between $1 and $3 per square foot of cultivation space, depending on whether its outdoor, mixed light or indoor. Supervisors voted to suspend the tax entirely for two years in 2022 but opted to reimpose it at a 90-percent reduced rate beginning for the 2024 cultivation year, with payments due in Spring of 2025. At the same time, they voted to begin cracking down on farms with unpaid tax bills.

It's uncertain of how much of the $10.3 million owed the county will be able to collect, as some have estimated the bulk of the $6.1 million owed by those who have not reached payment plans is for farms that have gone out of business, with their owners having left town and the properties involved having changed hands.

The bills coming due is also a point of anxiety for the local cannabis industry, which is already struggling amid statewide oversupply, low wholesale prices and what farmers deem excessive regulatory and compliance costs. The Humboldt County Grower’s Alliance (HCGA) has warned that the county’s effort to collect on owed Measure S taxes, coupled with the state no longer granting provision licenses beginning next year, could result in a “deck clearing” in 2024, with many farms going out of business.

“I’m hearing from a number of farmers who don’t have the money, who just still don’t have the money,” HCGA Executive Director Natalynne DeLapp said.

Editor's note: This story was updated from a previous version to correct the date by which owed Measure S taxes need to be paid in full. The Journal regrets the error.
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Friday, February 2, 2024

Humboldt Cannabis Grower to Pay $750,000 for Violating State Water, Wildlife Regulations

Posted By on Fri, Feb 2, 2024 at 10:48 AM

The settlement includes a record penalty for a water rights violation in California. - FILE
  • File
  • The settlement includes a record penalty for a water rights violation in California.
A Humboldt County cannabis grower has agreed to pay $750,000, remove unpermitted ponds and restore streams and wetlands after state officials accused him of  violating regulations protecting water supplies, wildlife and waterways.

Of the total, $500,000 is a record penalty for a water rights violation in California. State officials say the violations by Joshua Sweet and the companies he owns and manages, Shadow Light Ranch, LLC and The Hills, LLC, continued for years and were “egregious,” damaging wetlands and other resources. 

Under the settlement, Sweet will have to pay an additional $1 million if the remediation work outlined is not completed.

In a statement to CalMatters, Sweet said, “If the full penalty and remediation costs were due today it would take everything I own.”

“Although I will follow through with my end of the settlement, I do not believe this is fair or just, and I believe I have already suffered way too much,” Sweet, a licensed cannabis cultivator, said in the emailed statement. 

“Even during our court-mandated settlement conference, they were asked why they would go after a small independent businessman with these type of enormous fines usually reserved for huge corporations that destroy ecosystems.”

In the settlement, Sweet agreed that “developing the properties in Humboldt County … resulted in violations of the California Fish and Game Code and the California water Code.” 

“Although I will follow through with my end of the settlement, I do not believe this is fair or just, and I believe I have already suffered way too much.”

Joshua Sweet, Humboldt County cannabis owner

The companies’ 435 acres of land are part of the Emerald Triangle, where cannabis reigns. Springs and streams of the Bear Canyon Creek Watershed cross the land and eventually drain into the South Fork Eel River — a wild and scenic river that provides critical habitat for threatened and endangered species of steelhead, Chinook and coho salmon. 

The settlement comes as the cannabis industry is still trying to find its footing after legalization, and as its water use, especially for illegal cannabis operations, becomes increasingly contentious.

The agreement, approved by the Humboldt County Superior Court and announced last week, is the culmination of years of inspections by state water and wildlife officials dating back to 2016, according to the timeline outlined in the initial complaint

It “resolves violations … that include: the owner’s destruction of wetland habitat and stream channels; conversion of oak woodland to grow cannabis; and failure to … satisfy permitting requirements,” the state’s announcement of the deal said.

Yvonne West, director of the State Water Resources Control Board’s office of enforcement, said Sweet didn’t have authorization to divert water to the reservoirs and use it. Between 2017 and 2020, Sweet took about 16.2 acre-feet of water for three ponds, according to an email from the water board — approximately enough to supply about 49 households for a year. 

“The ordered penalties are modest given the scope of damage, the length of time the site has been left unremediated and considering the unjust enrichment or benefit to Mr. Sweet from running a business for several years without going through the necessary permitting process,” said Jeremy Valverde, assistant chief counsel at the California Department of Fish and Wildlife, in an emailed statement. 

Sweet and his businesses “for years resisted our attempts to cooperatively work on restoration and recovery of those resources, leaving formal enforcement as our only option,” said Joshua Curtis, the North Coast Regional Water Quality Control Board’s assistant executive officer.

Sweet said, though, that the case didn’t have to play out like it did. “Offers were made and denied,” he said. “There would be no settlement without their need to ‘make an example of me first’.”

The size of the penalty is notable because the water board has limited powers to enforce California’s arcane water rights system. A weeklong standoff during a drought, when ranchers pumped more than half of the Shasta River’s water in violation of state orders, netted a $500 per day fine that reached $4,000, or roughly $50 per rancher. 

“The ordered penalties are modest given the scope of damage, the length of time…and considering the unjust enrichment or benefit to Mr. Sweet from running a business for several years.”

Jeremy Valverde, California Department of Fish and Wildlife

State lawmakers floated a bill last year that could triple the fines for water rights violations, though the bill has thus far stalled. And in 2022, a new law enhanced penalties for cannabis-related violations to $3,500 per day, though this took effect after then-Attorney General Xavier Becerra filed the complaint. 

“This was an ongoing use by Mr. Sweet and the penalties are over an approximately four-year period for unauthorized diversion and use of water to support cultivation,” West said. “Five hundred dollars a day, multiple violations over a four-year period, does really add up. And then again we did have the additional types of violations at play here as well.”

The cannabis operation’s complex irrigation system came to state officials’ attention after Sweet notified the Department of Fish and Wildlife of plans to further develop the property in 2015, the 2020 complaint said.  

Over the years, inspections by state agencies turned up “violations … for unlawful alteration of the bed, channel, or bank of a stream and … unlawful sediment discharge into waters,” the complaint said. They also turned up storage tanks and three storage ponds, two of which predated his ownership and one that, according to the complaint, Sweet had constructed despite the warning that it needed a permit. 

The pond was in a location that “disturbs/inundates wetlands with a direct hydrologic connection and discharge to a … tributary to the South Fork Eel River,” the complaint says. “Additionally, the Property’s other ponds, multiple illegal stream crossings, and road-associated landslide discharge or threaten to discharge to unnamed tributaries of the South Fork Eel River.” 

The pond is one of the reasons state officials considered the case egregious, West said. “We didn’t have the opportunity to review and catalog the status of that wetland or the benefits of that wetland before it was destroyed.” 

Sweet, the grower, said the lengthy process “has caused so much undue and unnecessary strain, pain, and suffering on me and my health, my family, my friends, and this community.”

“I thought what I was following the law and had hired the proper professional team to abide by the myriad of requirements,” Sweet added. “My suffering does not end, and I will continue to struggle for the foreseeable future. Which is, I guess, what they wanted.” 

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Tuesday, January 2, 2024

New Law Gives Employees Cannabis Protection

Posted By on Tue, Jan 2, 2024 at 12:32 PM

Starting Jan. 1, California employers are now barred from asking workers about their use of cannabis outside of work, and from discriminating against them because of it.

Two bills signed by Gov. Gavin Newsom in the past couple of years aim to strengthen the state’s legal cannabis industry by updating outdated laws. Assembly Bill 2188, which Newsom signed in 2022, will prohibit employers from using the results of hair or urine tests for marijuana — which can detect traces of cannabis for days or weeks — in their decisions to hire, fire or penalize workers.

When the governor signed A.B. 2188 along with other cannabis-related bills in 2022, he said in a press release that “rigid bureaucracy and federal prohibition continue to pose challenges to the industry and consumers.”

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Tuesday, December 19, 2023

Judge Rules Voters Should Decide Cannabis Initiative

Posted By on Tue, Dec 19, 2023 at 11:57 AM

Voters will get to decide the fate of the Humboldt Cannabis Reform Initiative in March, a superior court judge has ruled.

In a five-page ruling filed last week, Humboldt County Superior Court Judge Timothy Canning rejected arguments put forward by the Humboldt County Growers Alliance (HCGA) and seven cannabis farmers that proponents of Measure A misled voters while gathering signatures to qualify the initiative for the ballot and failed to provide them with enough supporting information.

“To be clear, the court makes no findings on the merits of Measure A, as that is for the voters to decide,” Canning wrote in his ruling. “But the court does find there is in an insufficient showing of objectively and deliberately untrue facts or statements in Measure A such that the court should prevent Humboldt County voters from deciding whether or not to adopt it.”

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Tuesday, November 14, 2023

Proponents, Opponents Talk Measure A

Posted By on Tue, Nov 14, 2023 at 5:53 PM

About 75 people attended a Humboldt Emeritus and Retired Faculty and Staff Association lunch meeting to hear opponents and proponents discuss the Humboldt Cannabis Reform Initiative. - MARK LARSON
  • Mark Larson
  • About 75 people attended a Humboldt Emeritus and Retired Faculty and Staff Association lunch meeting to hear opponents and proponents discuss the Humboldt Cannabis Reform Initiative.
Measure A, known as the Humboldt Cannabis Reform Initiative, is shaping up to be one of the most controversial things on the March ballot and this afternoon a group of about 75 people got a close-up look at some of those arguing most vociferously for and against it.

Held at the Baywood Country Club in Arcata, the Humboldt Emeritus and Retired Faculty and Staff Association luncheon meeting saw presentations by proponents Mark Thurmond and Betsy Watson, herself a Cal Poly Humboldt professor emerita, both of whom played central parts in conceiving, drafting, funding and circulating the initiative to overhaul Humboldt County’s cannabis regulations. On the other side of the issue, the group also heard from Humboldt County Growers Alliance Executive Director Natalynne DeLapp, who described the initiative as “bad policy,” and Humboldt County Planning Commissioner Noah Levy, who said he worries the initiative, if passed, would prevent some farms from making environmental improvements.

The discussion was contentious but mostly civil, despite an outburst from a man in the crowd that briefly derailed Thurmond’s presentation before the man was escorted out of the room.

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Tuesday, April 25, 2023

Proponents Stand by Cannabis Reform Initiative, Warn County to Correct 'Distortions'

Posted By on Tue, Apr 25, 2023 at 10:17 AM

Proponents of the Humboldt Cannabis Reform Initiative are standing by their proposal that would overhaul the county’s cultivation regulations if passed by voters next year, saying the county’s analysis of the measure is “packed with factual errors, untruths and distortions.”

A county staff report on the 38-page initiative presented to the Humboldt County Board of Supervisors last month warned it would have “dire consequences” for the industry, saying that in addition to capping the number and size of new cannabis farms in the county, it would also immediately render 400 of the county’s permitted farms “non-conforming.” Due to ambiguities in the initiative’s language, staff also posited the initiative could then prevent these already permitted farms from making environmental improvements — like adding solar arrays or increasing water storage — and obtaining non-cultivation permits that would allow for tourism or processing on site.

At the supervisors' March 7 meeting, dozens of cultivators addressed the board to decry the initiative, warning it would have dire impacts on an already struggling industry.

The board appointed an ad-hoc committee — comprising Fourth District Supervisor Natalie Arroyo, Second District Supervisor Michelle Bushnell and Planning Director John Ford — to meet with the initiative’s proponents to see if they could find common ground and persuade them to pull the initiative from the March of 2024 primary ballot. (Because the initiative has qualified for the ballot it can’t be amended before going before voters, and if passed it could only be changed by another vote of the people.)

The ad-hoc committee reportedly met at least twice but does not seem to have moved the needle, as the initiative's proponents sent a letter to the county last week alleging the county staff analysis contained “inaccuracies and mischaracterizations.” Further, the letter warned that continued efforts by the county to disseminate information about the initiative could run afoul of the California Political Reform Act, which prohibits public officials from using public resources to influence campaigns.

“The county can’t use our tax dollars to take sides in this fight,” said proponent Mark Thurmond in a press release. “They have to be thorough, accurate, and fair — and that’s why the board needs to retract its analysis of our initiative. The 7,000 people who signed our petition deserve to be represented too.”

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Saturday, April 8, 2023

Bushnell Quiet on Possible Cannabis Conflict

Posted By on Sat, Apr 8, 2023 at 7:00 AM

Michelle Bushnell
  • Michelle Bushnell
With Humboldt County’s cannabis cultivation industry on edge after an initiative to overhaul local cannabis regulations qualified for next year’s ballot, an ad hoc committee is attempting to negotiate with the initiative’s proponents to see if they’ll withdraw it.

But questions have abounded about whether it’s appropriate for one of the Humboldt County supervisors who volunteered to be on the committee to take part in its discussions and vote on the issue.

The Fair Political Practices Commission opined in a non-binding advice letter last year that Second District Michelle Bushnell was right to recuse herself from a vote on tax relief for the cannabis industry early in 2022 because — as the owner of a cannabis farm — she had a conflict of interest on the issue and the vote’s outcome could “have a reasonably foreseeable, material financial impact on [her] real property interest.”

But Bushnell, who holds a permit to cultivate 25,560 square feet of outdoor cannabis and 20,000 square feet of light deprivation cannabis on a property she owns in Southern Humboldt under her Boot Leg Farms LLC, did not raise the potential conflict when voting on the initiative earlier this year or volunteering to serve on the ad hoc committee aimed at keeping it from the ballot. (Bushnell’s son also holds a permit to cultivate 17,900 feet of outdoor cannabis on a property Bushnell owns.)

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Monday, February 27, 2023

‘Dream Big:’ Cannabis Workers Search for New Futures as Emerald Triangle Economy Withers

Posted By on Mon, Feb 27, 2023 at 9:58 AM

Leann Greene of the Humboldt Workforce Coalition at the Humboldt County Library in Garberville on Feb. 8, 2023. - PHOTO BY MARTIN DO NASCIMENTO, CALMATTERS
  • Photo by Martin do Nascimento, CalMatters
  • Leann Greene of the Humboldt Workforce Coalition at the Humboldt County Library in Garberville on Feb. 8, 2023.
GARBERVILLE — Leann Greene’s rose-colored glasses are scratched, cracked, sitting askew, but still firmly planted on her face during her latest monthly open house for the Humboldt Workforce Coalition.

For three hours this Wednesday afternoon in a sunny conference room at the public library, apprehensive cannabis workers, lured by a segment on the community radio station KMUD, trickle through, seeking a potential refuge from their collapsing industry. Greene is their counselor and confidante, a relentless cheerleader promoting new career opportunities.

“So dream big. It’s your life, right?” she tells one young man looking for help connecting to job possibilities in a place where there don’t seem to be many right now.

It’s a mantra for Greene.

“You’re kind of reinventing your life here, so dream big,” she tells Daniel Rivero, who fears he could lose his job at any moment after his hours were cut back at the small warehouse where he manufactures cannabis products for $17 an hour.

A crash in the price of weed over the past two years has sent California’s cannabis market reeling — and with it, the communities that relied economically on the crop for decades, even before the “green rush” of commercial legalization.

In the Emerald Triangle — the renowned Northern California region of Humboldt, Mendocino and Trinity counties that historically served as the hub of cannabis cultivation for the state and the country — growers who can no longer sell their product for enough to turn a profit are laying off employees and shuttering their farms. The cascading financial impacts have left local residents with broken dreams and a daunting question: If not cannabis, then what?

“We just need to reassess this whole situation as a community of what we can do to evolve with it instead of trying to go against it,” Rivero said.



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Monday, October 31, 2022

Supes to Consider Bushnell Censure

Posted By on Mon, Oct 31, 2022 at 2:29 PM

Michelle Bushnell
  • Michelle Bushnell
The Humboldt County Board of Supervisors is set Tuesday to consider the public censure of Supervisor Michelle Bushnell after an investigation sustained an allegation that the Second District representative mistreated a Planning Department staff member during a December of 2021 meeting.

The staff report states the “board action is limited to public censure,” which would require a two-thirds vote, in a situation when a violation of the board’s code of conduct is sustained following an investigation, in this case by Watsonville-based attorney Richard E. Nosky, who is described as a neutral third party investigator.

The findings relate to a grievance filed by a county planner late last year, which alleged the supervisor interfered with the issuance of a cannabis permit on behalf of a constituent and then acted unprofessionally — berating staff — in a meeting with the applicant, the planner and Planning Director John Ford.

According to Nosky’s summary, Bushnell violated two of the board's codes:  the first being the requirement to practice civility and decorum in discussions and debates and the other a requirement that supervisors support a constructive and positive workplace for county employees.

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Tuesday, July 5, 2022

California Cuts Cannabis Taxes to Heal Ailing Industry

Posted By on Tue, Jul 5, 2022 at 9:46 AM

Local cannabis farmers say plummeting wholesale prices have left many on the brink of insolvency, prompting them to push for tax relief. - SUBMITTED
  • Submitted
  • Local cannabis farmers say plummeting wholesale prices have left many on the brink of insolvency, prompting them to push for tax relief.
California is significantly overhauling its cannabis tax structure, including entirely eliminating a tax on growers, in an effort to boost a struggling legal industry begging for relief.

The changes, which were adopted last week as part of a broader state budget agreement, will also create tax credits for some cannabis businesses, expand labor rights within the industry and switch collection of a state excise tax from distributors to retailers. That tax will pause at 15 percent for three years, after which regulators could raise the rate to recoup lost revenue from discontinuing the cultivation tax.

Prominent cannabis industry groups praised the plan for its potential to lower costs and help make legal sales more competitive with an illicit market that remains robust six years after California voters legalized recreational marijuana. Yet even as the measure won overwhelming approval in the Legislature, it was met with vocal discontent from retailers who say they will not benefit and several lawmakers who complained that it did not do enough to address ongoing racial disparities in the industry.

While efforts to secure further assistance from the state may continue, they seem unlikely to gain favor any time soon with Gov. Gavin Newsom, who signed the tax revision on Thursday.

“I’m incredibly proud of this bill. It accomplishes an incredible amount of things for the betterment of all Californians,” Nicole Elliott, director of the Department of Cannabis Control and Newsom’s top cannabis adviser, told CalMatters. “So I think we need to take a moment to reflect on the fact that something great got done.”

Eliminating cultivation tax was a priority


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