US (CA): Struggling Monterey County cannabis growers win tax modification

An abundance in production is tanking the price for commercial cannabis in Monterey County and the rest of California, prompting local growers to ask elected officials to modify the way it taxes crops.

The industry has been lucrative for both growers and the county. This year’s cultivation tax revenue for the county is estimated at just a little more than $19 million. Total production and value for cannabis cultivation during 2020 was calculated at $484.1 million, according to the 2020 Monterey County Ag Report, an increase of $34.4 million from 2019.

But things are changing. Some growers have had to cut production by 50% because of the huge number of wholesale cannabis operations in the state. With that increasing supply and a stable demand, there will be pressure on prices. This became increasingly apparent during the summer and the downturn has increased since.

Business tax levied on cannabis crops is based on the square footage of production space. Different tax rates apply to different types of production – mixed-light, nursery, and indoor. Under current county law, growers can request a modification to their square footage once a year to accommodate market fluctuations.


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