To: BOARD OF SUPERVISORS
From: Cannabis and Auditor-Controller Treasurer-Tax Collector
Meeting Date: April 7, 2026
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Department Contact: |
Sara McBurney |
Phone: |
707-234-6680 |
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Department Contact: |
Chamise Cubbison |
Phone: |
707-234-6860 |
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Item Type: Regular Agenda |
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Time Allocated for Item: 45 Minutes |
Agenda Title:
title
Discussion and Possible Action, Including Direction to Staff Regarding Ordinance Amendments to Support Cannabis Business Tax Compliance, and Direction Regarding Delinquent Cannabis Business Taxes Beginning in 2018
(Sponsors: Cannabis and Auditor-Controller Treasurer-Tax Collector)
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Recommended Action/Motion:
recommendation
Provide direction to staff to return with ordinance amendments that will support cannabis business tax compliance, and provide direction to staff regarding delinquent cannabis business taxes beginning in 2018.
End
Previous Board/Board Committee Actions:
On February 27, 2023, the General Government Committee heard an item that proposed the adoption of an ordinance amendment to sections 6.32.050 and 6.32.100 of the Mendocino County Code to provide a reduction in the Cannabis Business Tax for Tax Years 2023 and 2024 and to establish a penalty and interest amnesty program and a prior year tax payment plan.
On March 28, 2023, the Board of Supervisors voted to adopt the recommended action from the General Government Committee Meeting.
On July 23, 2024, the Board of Supervisors directed County Counsel to create an ordinance amendment to reduce the Cannabis Business Tax by 40% for calendar year 2025 and 35% for calendar year 2026.
On September 24, 2024, the BOS adopted an ordinance amendment reducing the Cannabis Business Tax by 40 percent for calendar year 2025 and 35 percent for calendar year 2026.
On November 4, 2025, the Board of Supervisors directed staff to research options for the collection of delinquent Cannabis Business Taxes, and during the March 24, 2026, meeting further directed staff to return this item for discussion at the April 7, 2026, Board meeting.
Additionally, during the March 10, 2026, BOS meeting, the BOS referred the current Cannabis Business Tax reduction to the General Government Committee as a separate topic.
Summary of Request:
On November 4, 2025, the Board directed staff to explore options for collecting delinquent Cannabis Business Taxes. In response, the Cannabis Division engaged with the Treasurer-Tax Collector’s Office (“TTC”) to gain a deeper understanding of current tax collection processes and identify opportunities for improvement.
Staff determined that an efficient way to address tax compliance would be to connect compliance between a Cannabis Cultivation Business License (“CCBL”), which allows cultivation of commercial cannabis, and a requirement of Cannabis Business Tax compliance. County code does not specifically include CCBL tax compliance to be considered as a requirement for holding a CCBL or include cannabis business tax compliance as a reason for license termination or non-renewal. Ordinance amendments to MCC Chapter 10A.17 could specifically add this requirement and streamline the due process for CCBL termination relating to nonpayment of cannabis business taxes.
If the BOS adopts an ordinance as recommended by staff, current CCBL holders that are delinquent on their cannabis business taxes may be subject to license non-renewal and future termination unless further guidance is provided by the BOS. Current CCBL holders have approximately $1.2 million in delinquent cannabis business taxes (excluding penalties and interest) related to tax years 2020-2024.
The BOS has previously authorized a payment plan for delinquent taxes, however, the outcome did not generate a significant amount of revenue. The TTC is supportive of a final amnesty program that could be implemented if directed by the BOS.
Finally, there is an unquantified amount of delinquent cannabis business taxes from the 2020-2024 period associated with CCBLs which are no longer operating. Additionally, there are delinquent cannabis business taxes from years 2018 - 2019, which the TTC believes are uncollectable.
It is requested that the BOS give direction to staff regarding these delinquent taxes or refer this matter to the General Government Committee for a more focused review of delinquent cannabis business taxes and to make a recommendation to the BOS on pursuing collection of them, or deeming them uncollectable.
Alternative Action/Motion:
Provide alternative direction to staff.
Strategic Plan Priority Designation: A Thriving Economy
Supervisorial District: All
Vote Requirement: Majority
Supplemental Information Available Online At: N/A
Fiscal Details:
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source of funding: Total amount of Cannabis Business Taxes budgeted in the current Fiscal Year, inclusive of a previously authorized 35% reduction: $1.445 Million |
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current f/y cost: N/A |
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budget clarification: Board direction to amend the ordinance as recommended may lead to increased Cannabis Business Tax collection rates in the future. |
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annual recurring cost: N/A |
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budgeted in current f/y (if no, please describe): N/A |
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revenue agreement: No |
AGREEMENT/RESOLUTION/ORDINANCE APPROVED BY COUNTY COUNSEL: Yes
CEO Liaison: Executive Office
CEO Review: Yes
CEO Comments:
FOR COB USE ONLY
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Executed By: Deputy Clerk |
Final Status: Item Status |
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Date: Date Executed |
Executed Item Type: item |
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Number: |
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