To: BOARD OF SUPERVISORS
From: General Government Committee
Meeting Date: May 5, 2026
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Department Contact: |
Supervisor Mulheren |
Phone: |
707-463-4221 |
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Department Contact: |
Supervisor Haschak |
Phone: |
707-463-4221 |
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Item Type: Regular Agenda |
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Time Allocated for Item: 30 Minutes |
Agenda Title:
title
Discussion and Possible Action Regarding a Recommendation from the General Government Committee Related to Delinquent Cannabis Business Taxes
(Sponsor: General Government Committee)
End
Recommended Action/Motion:
recommendation
Provide direction to staff to return with ordinance amendments to address the following seven issues:
1. Write off as uncollectable the delinquent 2018 and 2019 Cannabis Business Tax.
2. Write off as uncollectable the delinquent 2020 through 2024 Cannabis Business Tax owed by cultivators no longer active in the program.
3. Offer Amnesty for Interest and Penalty for delinquent Cannabis Taxes for Tax Years 2020 through 2024 for cultivators. Payments must be in the amount of each individual outstanding Year’s amount (no installment plans).
4. Cannabis Business Tax and True Ups for Tax Years 2025 and 2026 due and payable with Interest and Penalty if not paid timely.
5. Cancel True Up minimum tax starting Tax Year 2027 - all cultivators pay 2.5% starting 2027.
6. Amend the Ordinance to require full Cannabis Business Tax payment and report filing compliance for all Cannabis Business License renewals starting with 2028 year.
7. All Cannabis Business Taxes must be paid current by January 31, 2028, and Quarterly Filings must be current by January 31, 2028, for 2028 License Renewal.
End
Previous Board/Board Committee Actions:
Ordinance No. 4361 adopted Chapter 6.32 - Cannabis Business Tax on August 2, 2016. March 2, 2022, the Board directed staff to prepare Amendments to the Cannabis Business Tax to create a procedure where cultivation sites could be fallowed with relief from the minimum tax requirements; this was brought back to the Board on May 17, 2022. April 19, 2022, the Board approved a motion to create a Fallowing Program and to reduce Cannabis Business Taxes, including the minimum business tax, by 50% for two years starting in Tax Year 2023. February 27, 2023, the General Government Committee (GGC) recommended the Board take action to approve the Cannabis Business Tax reduction, a limited penalty and interest amnesty program, and create a tax payment plan. March 28, 2023, the Board adopted an Ordinance amending the Cannabis Business Tax to reduce Cannabis Business Taxes by 50% for calendar years 2023 and 2024. June 26, 2024, the GGC made a recommendation to the Board that a reduction in the Cannabis Business Tax should be continued for a two-year period beginning in calendar year 2025, and ending December 31, 2026. On July 23, 2024 the Board directed County Counsel to draft an ordinance amendment extending the Cannabis Business Tax reduction for 2025 and 2026 in the amount of 40% and 35%, respectively; the implementing ordinance was adopted on September 24, 2024. On April 7, 2026, the Board received information that Cannabis Business Taxes remain unpaid, in some cases beginning in 2018, and referred the matter of these delinquent taxes to the GGC for discussion and a recommendation back to the full Board.
Summary of Request:
The Cannabis Business Tax was established through the will of the voters, with passage of Measure AI in 2017. An Advisory Measure (AJ) was also approved at that time, indicating that a majority of the revenue would fund enforcement of marijuana regulations, mental health services, county road repair, and fire & emergency medical services.
Based on Board action, the Cannabis Business Tax rate was initially reduced by 50% in 2023 and 2024. Later Board action then reduced the Cannabis Business Tax rate by 40% in 2025, and 35% through 2026. Additionally, the Board authorized a limited payment and interest amnesty program. Beginning in 2020, the Cannabis Equity Grant Program also provided over $1 million in direct fee relief to verified equity applicants.
Despite these supportive actions, a significant amount of Cannabis Business Taxes remain unpaid. On April 7, the Board directed staff to develop ordinance amendments that will provide clear authority to remove CCBLs from cultivators who do not pay their Cannabis Business Taxes. The General Government Committee was asked to look into the matter of unpaid Cannabis Business Taxes, delinquent in some cases since 2018, and make a recommendation to the Board regarding these tax debts. The Committee supported seven points contained within a memo provided by the Tax Collector, as follow:
1. Write off as uncollectable the delinquent 2018 and 2019 Cannabis Business Tax.
2. Write off as uncollectable the delinquent 2020 through 2024 Cannabis Business Tax owed by cultivators no longer active in the program.
3. Offer Amnesty for Interest and Penalty for delinquent Cannabis Taxes for Tax Years 2020 through
2024 for cultivators. Payments must be in the amount of each individual outstanding Year’s
amount (no installment plans).
4. Cannabis Business Tax and True Ups for Tax Years 2025 and 2026 due and payable with Interest
and Penalty if not paid timely.
5. Cancel True Up minimum tax starting Tax Year 2027 - all cultivators pay 2.5% starting
2027.
6. Amend the Ordinance to require full Cannabis Business Tax payment and report filing compliance
for all Cannabis Business License renewals starting with 2028 year.
7. All Cannabis Business Taxes must be paid current by January 31, 2028, and Quarterly Filings
must be current by January 31, 2028, for 2028 License Renewal.
It is recommended that the Board direct staff to include these points within ordinance amendments to be returned to the Board for approval.
Alternative Action/Motion:
Provide direction to staff.
Strategic Plan Priority Designation: An Effective County Government
Supervisorial District: All
Vote Requirement: Majority
Supplemental Information Available Online At: N/A
Fiscal Details:
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source of funding: Cannabis Business Tax (CBT) |
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current f/y cost: The amount of CBT delinquent in the current Fiscal Year cannot yet be calculated. |
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budget clarification: Uncollected CBT represent lost revenue for fiscal priorities identified through Measure AJ. $1.445 million in CBT revenue is budgeted to be received in FY 25/26. |
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annual recurring cost: Unknown, variable. |
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budgeted in current f/y (if no, please describe): N/A |
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revenue agreement: Yes |
AGREEMENT/RESOLUTION/ORDINANCE APPROVED BY COUNTY COUNSEL: N/A
CEO Liaison: Executive Office
CEO Review: Yes
CEO Comments:
FOR COB USE ONLY
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Executed By: Atlas Pearson, Senior Deputy Clerk |
Final Status: Direction Given to Staff |
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Date: May 5, 2026 |
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