Humboldt County has extended the deadline for local farmers to pay their cannabis cultivation taxes, marking what officials say will be the final extension. Hundreds of farmers in the area owe these taxes, and the county is grappling with the realities of a struggling cannabis market.
In 2016, voters approved the Measure S Cannabis Excise Tax, which imposes a fee of $1 to $3 per square foot on cultivation areas. When this measure was enacted, the market was thriving, but since then, cannabis prices have significantly dropped due to oversupply. Many small-plot farmers, who initially felt optimistic about their profit potential, are now worried about remaining financially viable.
A staff report from the county’s Planning and Building Department noted that Measure S was intended to draw from the profits of legal cannabis, a situation that has changed dramatically. The report stated, “Measure S was originally envisioned as a tax that would come out of the bounty that would be associated with legal cannabis. That is not the current circumstance and is unlikely to ever become the situation.”
Humboldt County’s board of supervisors acknowledges these changing market conditions. Over the past four years, the county has either suspended or significantly reduced the tax. However, about 600 growers, which represents roughly one-third of legal operations, still owe taxes. The new deadline to pay these taxes has been pushed to the end of March.
On Tuesday, many growers attended the board meeting, pleading for additional time. Craig Nejedly, CEO of Talking Trees Farms, shared his concerns, stating that he has paid off more than half of his taxes but still owes around $31,000. He expressed frustration, noting, “There’s absolutely no way I’m gonna be able to come up with that before the end of this month. So it’d be putting my farm, my family, my employees out of business essentially.”
After hearing from local growers, the board decided to extend the deadline once again. Farmers who have set up payment plans will have until December 31 to settle their debts, while over 200 businesses that have not made any payments must contribute something by April 3 to avoid losing their licenses.
Supervisor Natalie Arroyo emphasized that this would be the final extension. “We are repeating this one more time,” she stated, voicing her reluctance to extend the deadline again. “I am not willing to do it again.”
Currently, approximately 76% of licensed cannabis farmers in Humboldt County have settled their Measure S taxes. These taxes fund county services, including the cleanup of abandoned cultivation sites. The county continues to waive late fees for those who pay by the March 31 deadline.
The staff report also raised concerns about the effectiveness of Measure S, suggesting it does not generate the expected revenue and imposes undue burdens on farmers. It argued that the tax is cumbersome to implement and diverts staff resources from more beneficial county activities.
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