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‘Gouging People Who Don’t Participate’

We couldn’t help laughing several times during the Board of Supervisor’s Cannabis Tax Appeal Board discussion on Tuesday. (Humor is where you find it, and this particular source never disappoints.)

First, during public expression, there was Fort Bragg grower Jude Tillman of Fort Bragg’s making a perfectly reasonable request for a refund. She'd paid lots of money for the County's Track and Trace system which never materialized.

Response from the Supes? Thank you. (The Grand Jury recommended that speakers at least get a response, but the mere thank you is all most speakers get regardless of the legitimacy of the issue they raise.)

Several pot growers objected to the $5,000 minimum grower cultivation tax, which applies even if they didn’t grow anything. 

There was a near-collective response to this one: Too bad, pay up. 

Supervisors McCowen and Gjerde claimed that Mendo’s taxes are “bargain basement” compared to neighoring counties, and that pot growers are famous for selling out the back door to the black market, so no sympathy for you, suckers.

Mendo apparently thinks that they’re being fair to the local pot growers trying to get legal by even setting up an appeals process, however slanted.

But the funniest part of the discussion was the Appeals Board’s fee to apply for leniency. Unhappy about getting dinged five grand for a product you didn't produce? Here’s what Mendo offers:

Staff suggested an “Appeals Board” made up of CEO Carmel Angelo, Planning Director Brent Schultz, and Ag Commissioner Harindar Grewal (or designees thereof).

Tax Collector Shari Schapmire and Planning Director Brent Schultz were worried that the appeals board would have to deal with a flood of applications, which might involve time-consuming inspections by staff who are already overloaded trying to process hundreds of permit applications — to little effect.

Supervisor Ted Williams alone seemed to grasp the obvious contradictions in the entire approach.

“I would prefer that we treat the legal market as legal,” said Williams tautologically. “Prohibition is over. The idea that an applicant may have done something in the black market and therefore we need to make sure the County gets its take doesn't sit well with me. In Mendocino County we need to accept that the people of the state have decided that cannabis has a legal market and we presume when someone signs under penalty of perjury that they did not cultivate that that's adequate proof. I don't think we can ask somebody to come before an appeals body and prove what they didn't do. There is a practical concern there. Do we need photos that they flew over throughout the summer and took photos of their land to show there were no any plants down there? And out of general fairness, some people will have more evidence than others. I don't see how we can do that. It’s a fine concept. But when you start looking at the details I don't see how it can possibly come together. It will be a can of worms that opens up even more questions about what do you do with the evidence, and if it's really enough for an appeal. Could it be half an hour — or 17 hours?. We need to cut down the scope of this process. 

A little later Williams added, “Farmers across the country have crop loss. It's recognized. The idea that we are going to somehow treat this agricultural product differently — We have a lot of cultivators staying in the black market. They look at the process and they just roll their eyes. They say there's no way they can get through it. Our goal should be to try to bring in as many as possible. The more burdens we have, the more we complicate the process, the less uptake there will be. If we tell a cultivator that if they lose their entire crop they're still paying the full amount, that's not an incentive to participate.”

Supervisor McCowen said he thought the appeals fee might be around $1,000 based on the County’s other appeals processes.

“I'm new here,” replied Williams. “I completely missed the estimate on the $1000 appeal. That seems outrageous. You have somebody coming forward saying, I didn't grow, I couldn't have; look at this, I only had eight hours — and you are going to charge this individual $1000 to make the case that in eight hours he didn't cultivate cannabis? There are some just cut and dried out of general fairness — it's like if we were to send a tax bill to somebody who didn't build a house and charge them $1000 to prove that they didn't build the house. It's just — it doesn't matter what Humboldt or Sonoma counties are doing with their tax rates. Out of general fairness I don't think we can be gouging people who didn't participate. You get into some of these others like, Did they grow quality weed? Was it a good year? I can understand that that is very murky and you can't ask staff to go out there and make a determination. But where they didn't cultivate? There were no plants? You can’t ask for $1000.”

Although Supervisor John Haschak seemed vaguely sympathetic to some of Williams’ positions, Williams’ argumenets mostly fell on deaf ears among his colleagues.

After a prolonged and mostly irrelevant bureaucratic discussion — typical of everything the County tries to do with pot regulation as they blame the state for the overly complicated and endlessly fluid rules involving the miracle drug— the Board approved the staff proposal to set up an appeals process and turn the problem over to the three most expensive officials in the County who, the Auditor will insist, must charge a fee based on “full cost recovery” for the — what? — 17 hours of appeals board time?

The other humor in this discussion was the serf-like obsequiesness of the gouged growers. Here they are being pushed even further down the rabbit hole, yet they reminded us of the famous quote from a former writer with the AVA, ‘Pathetic Doug’ Holland who, after attending a sedate protest in San Francisco in the 90s, said it was as if the protesters were asking, “Excuse me, officer, are we chanting too loud?” Or, according to the Supe's rules of meeting decorum, “Are we twinkling too loud?” How much of this will the pot growers who are trying to go legit going to tolerate?

Staff was directed to come back with an appeals process and a proposed fee for the appeals. We’re sure that CEO Angelo, Planning Director Schultz and Ag Commissioner Grewal will 1) appoint some poor, overworked staffers to conduct the hearings, and 2) deny almost everyone no matter what the pot growers pay for their appeals or offer as “evidence” that they didn’t grow anything, and 3) gouge hell out of the appellants.

After all, without “gouging people who didn’t participate,” as Supervisor Williams described it, Mendo can’t provide those important services the County provides, as Supervisor McCowen described them.

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