Robert Celt
New Member
While the medical marijuana industry is budding, business is booming in Santa Cruz County.
The region's 14 dispensaries rang up $32 million last year from the sales of flowers, concentrates, tinctures, edibles and other forms of the drug.
And it's a boost to local coffers. In 2014, voters in the city of Santa Cruz and the county of Santa Cruz passed Measures L and K, which levy a 7 percent tax on the receipts of pot retailers with the option to increase to 10 percent.
At that time, officials expected the taxes to bring in $100,000 annually for Santa Cruz, where there were two dispensaries until one closed in November, and $900,000 between November and June, the rest of the fiscal year, to the county, where there are a dozen dispensaries in unincorporated areas.
The county expected to collected $1.6 million for the full year, but got a bit more -- $1.95 million between November 2014 and October 2015. The city also collected more than anticipated -- $305,000 between January and December 2015.
Some of that money goes to both jurisdictions' general funds, and a large share of the county's revenue helps to enforce medical marijuana regulations.
"There's a bunch of cannabis grow sites in the mountains that are out of compliance with our ordinance," said county spokesman Jason Hoppin. "The cannabis tax is being used to fund enforcement."
Officials have gone to 130 grow sites around the county after complaints were filed, and they estimate there are "hundreds more," Hoppin said.
At the farms, they've found weapons and reported extensive environmental damage. Guerilla growers are mowing down forest, damming parched streams that carry struggling salmon and steelhead and setting up camps that pose fire and other safety hazards, county officials say. Just how many growers there are in the county is unknown.
To combat those problems, the county used half of the Measure K revenue to buy a four-wheel drive and to fund one sergeant and two detectives in the Sheriff's Office, a code compliance officer and a part-time auditor.
The county also recently established a temporary licensing system for small-scale grows while it works to create long-term regulations consistent with new state law.
At the same time, responsible dispensary operators are frustrated over the fact their patients are paying for enforcement against growers they want nothing to do with.
"What the dispensaries are selling is only a fraction of the cannabis that's being grown in the county," said Colin Disheroon, owner of Santa Cruz Mountain Naturals in Aptos.
But without a universal certification system or regulations, retailers can't know for sure if they're buying cannabis from a grow site that's not in compliance.
Disheroon also said some dispensary owners see the tax as them footing the bill for the county to come up with an ordinance for growers while they still can't apply for business permits.
Because of extensive environmental damage in the mountains and deadlines from the state, the county has focused on rewriting rules for cannabis cultivation first. But Hoppin said efforts are underway to offer business permits to the dispensaries.
"Not having a permit creates a lot of challenges for us. A lot of businesses don't want to work with us like banking institutions, lenders and insurance companies," Disheroon said. "I don't think a permit is necessarily going to resolve a lot of our problems, but it's an acknowledgement that we're an accepted business. It's one more step toward legitimacy."
The dispensary operators also say the cannabis business tax is too high, which drives some clients back to the black market and restricts growth. Disheroon and Bradd Barkin, chief executive officer of Central Coast Wellness Center in Ben Lomond, said they decided to pay the tax rather than pass is along to patients to stay competitive.
"They're pushing the limit right now," Barkin said. "All together, we're now paying 15 1/4 percent in taxes."
On top of the county's cannabis tax, the dispensary's patients are subject to the standard 8 1/4 percent sales tax on goods and services.
Cannabis facts
Annual medical marijuana sales in Santa Cruz County: $32 million.
Number of dispensaries in unincorporated Santa Cruz County: 12.
Number of dispensaries in city of Santa Cruz: 1.
Annual medical marijuana sales in California: $1.3 billion.
Number of dispensaries in California: 1,200 to 1,500.
News Moderator: Robert Celt 420 MAGAZINE ®
Full Article: Santa Cruz County Medical Marijuana Dispensaries Ring Up More Than $32.3M In Sales
Author: Samantha Clark
Contact: San Jose Mercury News
Photo Credit: Matthew Staver
Website: San Jose Mercury News
The region's 14 dispensaries rang up $32 million last year from the sales of flowers, concentrates, tinctures, edibles and other forms of the drug.
And it's a boost to local coffers. In 2014, voters in the city of Santa Cruz and the county of Santa Cruz passed Measures L and K, which levy a 7 percent tax on the receipts of pot retailers with the option to increase to 10 percent.
At that time, officials expected the taxes to bring in $100,000 annually for Santa Cruz, where there were two dispensaries until one closed in November, and $900,000 between November and June, the rest of the fiscal year, to the county, where there are a dozen dispensaries in unincorporated areas.
The county expected to collected $1.6 million for the full year, but got a bit more -- $1.95 million between November 2014 and October 2015. The city also collected more than anticipated -- $305,000 between January and December 2015.
Some of that money goes to both jurisdictions' general funds, and a large share of the county's revenue helps to enforce medical marijuana regulations.
"There's a bunch of cannabis grow sites in the mountains that are out of compliance with our ordinance," said county spokesman Jason Hoppin. "The cannabis tax is being used to fund enforcement."
Officials have gone to 130 grow sites around the county after complaints were filed, and they estimate there are "hundreds more," Hoppin said.
At the farms, they've found weapons and reported extensive environmental damage. Guerilla growers are mowing down forest, damming parched streams that carry struggling salmon and steelhead and setting up camps that pose fire and other safety hazards, county officials say. Just how many growers there are in the county is unknown.
To combat those problems, the county used half of the Measure K revenue to buy a four-wheel drive and to fund one sergeant and two detectives in the Sheriff's Office, a code compliance officer and a part-time auditor.
The county also recently established a temporary licensing system for small-scale grows while it works to create long-term regulations consistent with new state law.
At the same time, responsible dispensary operators are frustrated over the fact their patients are paying for enforcement against growers they want nothing to do with.
"What the dispensaries are selling is only a fraction of the cannabis that's being grown in the county," said Colin Disheroon, owner of Santa Cruz Mountain Naturals in Aptos.
But without a universal certification system or regulations, retailers can't know for sure if they're buying cannabis from a grow site that's not in compliance.
Disheroon also said some dispensary owners see the tax as them footing the bill for the county to come up with an ordinance for growers while they still can't apply for business permits.
Because of extensive environmental damage in the mountains and deadlines from the state, the county has focused on rewriting rules for cannabis cultivation first. But Hoppin said efforts are underway to offer business permits to the dispensaries.
"Not having a permit creates a lot of challenges for us. A lot of businesses don't want to work with us like banking institutions, lenders and insurance companies," Disheroon said. "I don't think a permit is necessarily going to resolve a lot of our problems, but it's an acknowledgement that we're an accepted business. It's one more step toward legitimacy."
The dispensary operators also say the cannabis business tax is too high, which drives some clients back to the black market and restricts growth. Disheroon and Bradd Barkin, chief executive officer of Central Coast Wellness Center in Ben Lomond, said they decided to pay the tax rather than pass is along to patients to stay competitive.
"They're pushing the limit right now," Barkin said. "All together, we're now paying 15 1/4 percent in taxes."
On top of the county's cannabis tax, the dispensary's patients are subject to the standard 8 1/4 percent sales tax on goods and services.
Cannabis facts
Annual medical marijuana sales in Santa Cruz County: $32 million.
Number of dispensaries in unincorporated Santa Cruz County: 12.
Number of dispensaries in city of Santa Cruz: 1.
Annual medical marijuana sales in California: $1.3 billion.
Number of dispensaries in California: 1,200 to 1,500.
News Moderator: Robert Celt 420 MAGAZINE ®
Full Article: Santa Cruz County Medical Marijuana Dispensaries Ring Up More Than $32.3M In Sales
Author: Samantha Clark
Contact: San Jose Mercury News
Photo Credit: Matthew Staver
Website: San Jose Mercury News
