California cities may tax destroyed cannabis crops

Municipal governments across California are moving to tax marijuana cultivation facilities based on square footage, not on actual crop production.

Such an approach could mean cultivators will potentially have to pay taxes on crops that fail to generate revenue because they were destroyed by weather or other causes, like the recent wildfires, The Union reported.

Here’s what you need to know:

  • Cannabis growers in Northern California are still reeling from wildfires that destroyed more than 30 cultivation facilities in October.
  • Officials in Nevada City, California, have proposed annual taxes on cultivators of $4 a year per square foot of canopy if the grow uses artificial lights; $3 per square foot if a cultivator uses both natural and artificial lighting; and $1 per square foot for all natural grows. Voters still must approve the proposal.
  • The city said it followed the lead of other municipalities across the state when it drafted its tax structure.
  • A member of the Nevada County Cannabis Alliance’s executive committee attempted to convince Nevada City to base marijuana cultivation taxes on sales. But the city council said there was too little time to finalize the rules and get them on a ballot.

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3 comments on “California cities may tax destroyed cannabis crops
  1. Mike on

    At 43562 sauare feet to an acre, that means tax is overburdening in an effort to force smaller growers i.e., 1 acre or less, out thereby making room for the mega growers and friends of pols that will get campaign contributions in payment for dumping small growers. Our govs dont care that people have been wiped out just greed. Maybe they can toss them paper towels.

  2. Lauren on

    Sonoma County – ground zero for the wildfires – is taking an “all or nothing” approach. If cannabis plants have been completely destroyed and are no longer usable, they won’t owe taxes on the amount that has been destroyed (though they still have to pay for the tax inspector to come out). But if the plants are just damaged, such that they could still be used to make oil but would fetch a lower price, then the cultivator still owes the full amount of taxes, which could range from $1/sq. ft to (wait for it) $11.25/sq. ft. depending on the size of the grow and type of lights used. In my opinion, this is incredibly unfair.

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