Dear Supervisors,

I am writing in strong support of Agenda Item R7 and the elimination of the Minimum Cannabis Business Tax, effective tax year 2027.

My name is Matthew Browning, and I operate Higher Origins, a platform focused on supporting small cannabis farms, product discovery, and the long-term survival of Mendocino County’s cannabis culture. Through our work with farmers, brands, and local operators, we see every day how difficult it has become for legacy cultivators to remain in the legal market.

The minimum cannabis tax is one of the clearest examples of a policy that no longer fits the reality of the industry. Farmers should not be taxed on theoretical revenue, failed crops, unsold inventory, or sales that may never materialize. Taxes should be based on actual sales, not on the assumption that a farm is profitable simply because it holds a license.

As we wrote in our Higher Origins article, Mendocino County is Failing its Cannabis Industry, the minimum tax functions less like a true business tax and more like another licensing fee. It taxes operators before they make money, which places even more pressure on farms already struggling with falling wholesale prices, limited market access, high compliance costs, permitting fees, testing, packaging, distribution, and state licensing requirements.

Mendocino County’s cannabis industry is not just another business sector. It is part of the county’s history, reputation, rural economy, and agricultural identity. But that legacy is being lost. Licensed canopy has dropped sharply, operators continue to leave the legal market, and the remaining farms are being asked to survive under a tax and fee structure that many simply cannot carry.

The County cannot preserve its legacy cannabis industry while continuing to tax farmers as if the market still resembles the early days of legalization. It does not. Wholesale prices are down, costs are up, and small farms are often locked out of the retail margins that make the broader industry profitable.

Eliminating the minimum tax is a practical and fair first step. If a cannabis business makes sales, it should pay based on those sales. If it does not, it should not receive a minimum tax bill that pushes it further into debt or out of the legal market entirely.

I urge the Board to support Item R7 and direct staff to develop the ordinance eliminating the Minimum Cannabis Business Tax. This is one of the most direct ways Mendocino County can show that it is serious about supporting the remaining small farms that helped build the county’s cannabis reputation in the first place.

Thank you for your time and consideration.

Sincerely,
Matthew Browning
Higher Origins

I fully support the elimination of the Minimum Cannabis Tax. It's hard enough to be a farmer without having to pay taxes on non-existent sales. Imagine having crop failure and still having to pay as if you had a crop to sell. Please vote to eliminate the Minimum Cannabis Tax as a way to help the remaining cultivators in this county work toward economic viability. Thank you.

Dear Honorable Supervisors,
The Mendocino Cannabis Alliance strongly supports the General Government Committee’s
recommendation to eliminate the minimum tax—commonly referred to as the “true-up”—from
the Cannabis Business Tax beginning in 2027. Since its inception, the minimum tax has
functioned as an inequitable burden on cultivators, failing to account for fluctuations in market
value and seasonal crop losses. While we appreciate the Board’s efforts to reduce both the tax
rate and minimum tax since 2023, we firmly support full elimination of the minimum tax moving
forward.
In addition, we respectfully request that the Board of Supervisors consider a full suspension of
the cannabis business tax for the 2027 tax year. While removing the minimum tax is an
important step, returning to the full 2.5% tax rate may, in many cases, result in cultivators paying
more in total taxes than they do under the current reduced structure. Without further relief, this
change risks undermining the intended benefit of eliminating the minimum tax.
The MCA also supports the General Government Committee’s efforts to bring delinquent
accounts into compliance, including proposed amnesty measures aimed at achieving
countywide good standing by 2028. A one-year suspension of the cannabis business tax in
2027 would directly support this goal—providing a realistic pathway for operators to resolve
outstanding balances while also acknowledging those who have remained current despite years
of disproportionate tax burdens.
More broadly, this proposal should be viewed as a revenue preservation strategy rather than a
temporary loss. Mendocino County’s licensed cannabis operators have experienced significant
attrition, and continued contraction of the regulated market will ultimately reduce the County’s
long-term tax base. A one-year suspension creates a bridge—stabilizing operators in the near
term so they can continue contributing to County revenues in the years ahead.
This timing is particularly critical given the rapidly evolving federal landscape. The federal
government’s recent move to reclassify medical cannabis under a less restrictive schedule
signals a meaningful shift toward broader reform and expanded market access. With additional
federal action anticipated in the near future, this moment represents a narrow window of
opportunity. Ensuring that Mendocino County’s operators can survive through this transition
positions them to participate in a potentially expanded marketplace, rather than being forced out
just as conditions begin to improve.
A temporary suspension of the cannabis business tax in 2027—similar to actions taken by
neighboring jurisdictions such as Humboldt County—would provide immediate relief, help
stabilize the local industry, and strengthen the County’s competitive position for future
investment. It also reinforces ongoing efforts to return delinquent operators to good standing,
while rewarding those who have remained compliant.
We recognize that this request comes at a time when the County is pursuing additional revenue
measures to support essential services such as roads and infrastructure. However, a one-year
suspension represents a strategic investment in the long-term viability of this sector. Supporting
operator survival today preserves the County’s ability to generate consistent and sustainable tax
revenue in the future.
Absent this action, further attrition is likely—resulting in fewer licensed operators, diminished
economic activity, and a reduced tax base for years to come.
For these reasons, we respectfully urge the Board to support both the elimination of the
minimum tax and a full suspension of the cannabis business tax for the 2027 tax year.
Thank you for your consideration.
Sincerely,
The Mendocino Cannabis Alliance

I fully support the elimination of the Minimum Cannabis Business Tax, Effective Tax Year 2027. Thank you for considering this option and directing staff find the path to make that happen.

Dear Supervisors, 

Thank you for being willing to discuss the Cannabis Taxes items R6 and R7 in tandem, as they are related and should be evaluated together, since R6 is retrospective and R7 is about the future.

With one exception, we agree with the recommendations expressed by the Tax Collector's memos, especially related to delinquent taxes. We also agree with their assessment that the minimum tax true up requirement can be easily removed, and we are glad to know County Counsel's interpretation is that the Board of Supervisors can perform this action. Going forward, taxes should be collected on actual sales. 

BUT we'd like you to consider amending the recommendations. Our additional request today is to create a tax moratorium for 2027 for all cultivation taxes, while you focus on collecting delinquent taxes.

We understand that the County is in a budget crisis, but we also all know that cannabis has been over-taxed over the past decade. Just last week Sonoma County removed cultivation tax completely. Humboldt County did the same earlier this year, and Trinity reduced their tax by 80%. The State has also removed the cultivation tax.

Cannabis is the only crop in California that has a tax attached to growing it. At the same time, small farms are struggling to get their products to market in our overly restrictive supply chain. Unfortunately, the State's regulations for our industry relegate most Mendocino cultivators to wholesale, even when they offer individually branded, retail-ready products, they cannot sell them themselves, since there is still no real farm direct to consumer pathway. And that is not likely changing much, if at all, in California, with the newly implemented Federal direction of Schedule 3. By the way, if the U.S. government moves toward considering cannabis as medicine, generally speaking, medicines are not taxed.

But 2.5% on wholesale prices is still a high tax. Especially on a product that the County realizes a tax on again at in County retailers. Approximate but realistic numbers as an example: A retail eighth-ounce sold to the customer for $30 (tax included), is first purchased, often on a 30-90 term basis, by retailers from farmers for $10. Obviously, the farmer pays for the associated costs of cultivation, like soils, nutrients, and fees to County P&B, State DCC, Water Board, etc. But small farms are also financially responsible for harvesting, trimming, testing, packaging, labeling, an additional percentage to the distributor to transport the product from the farm to retail, and taxes. After all of that. we are lucky if we see less than a $1 profit in the present market conditions.  It's nearly unworkable. Something's got to give...

The cannabis industry remains in an uncertain flux across the board, and locally, is in a free fall. You cannot squeeze blood from a stone. If you want to support your legacy cannabis cultivators, like you say you do, please consider our ideas to allow the fiscal equalization to sort itself out. A tax moratorium for 2027 will help those in delinquency catch up and give those of us who have paid taxes all along a much needed break, while stimulating economic activity in our county. If you adopt Tax Assessor's reccomendations with this additional amendment, by 2028, it will be clear who is still in operation and the cannabis program tax budget will be back in balance. We can all begin again from there...

Thank you,
Laura & Marty Clein