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California county considers 'death penalty' for cannabis farms

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By Lester Black, SFGATE

Santa Barbara County supervisors voted unanimously to approve a first reading of a new rule penalizing late tax payments. One California county is taking the old saying “a day late and a dollar short” to the extreme.

Santa Barbara County’s Board of Supervisors just gave their initial approval for a law that would shut down any cannabis business if they’re more than 30 days late on paying their taxes. At least one official expressed concerns that the measure would be a “death penalty” because there are no exceptions to the severe punishment for any companies who don’t pay.

The county’s Board of Supervisors passed the amendment to its cannabis ordinance unanimously in a first reading on June 27, but it still needs a second vote later this month before it becomes law. Two of the board members expressed concern over the amendment’s severe penalties. “This is not the way that we collect taxes in the county. I think we’ve gone from a slap on the wrist to the death penalty, and there’s got to be somewhere in between that we can all agree on,” Supervisor Steve Lavagnino said. Lavagnino later said he was convinced to vote for the measure after it was clarified that pot companies have a 30-day grace period to pay their county taxes. For example, for a tax bill due on Jan. 1, companies have until Jan. 30 to pay. If they pay on Feb. 1, they will lose their license. FILE: A cannabis crop at the Raw Garden cannabis farm in Buellton, Calif., on Oct. 2, 2018.The Washington Post/The Washington Post via Getty ImSanta Barbara County is home to one of California’s largest cannabis farming industries, rivaling even Northern California’s Humboldt County for the total amount of cannabis produced. Tax payments have become a growing concern for the entire state’s cannabis industry. Companies across the pot supply chain are drowning in millions of dollars of debt, and hundreds of cannabis stores missed a key tax deadline for state taxes this year. Santa Barbara County charges cannabis cultivators a 4% tax on their business revenue that must be paid quarterly. The county has struggled to collect taxes on its businesses, according to Brittany Odermann, deputy county executive officer. Odermann told the board during the June 27 meeting that county law allows pot farms to indefinitely delay payment on their quarterly taxes, with some farmers paying their taxes nearly a year late. FILE: Workers harvest cannabis plants at the Raw Garden cannabis farm in Buellton, Calif., on Oct. 2, 2018.The Washington Post/The Washington Post via Getty ImOdermann said the proposed law would immediately move to revoke a business license if a pot company is more than 30 days late on a quarterly tax bill. “To be clear, this language … would mean no exceptions. If someone is a day late, that’s it. Even if they’re in good standing otherwise,” Odermann said. Supervisor Das Williams voted to approve the measure, but said during the meeting that the severe penalty for late payments would probably put most companies out of business. “This is a standard that nobody else lives by,” Williams said. “If we all lived by this standard … we would all probably lose our job at some point.” The amendment is scheduled for a final vote next week. If it passes, it will go into effect Aug. 10.


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