LAKE COUNTY — The Lake County Board of Supervisors on Tuesday expressed support for county staff to apply for “cannabis equity” grant funding from the State of California.
“The state has created a program that can provide local jurisdictions that qualify (with) funding,” Lake County Tax Administrator Patrick Sullivan told the board during its regular meeting. Sullivan said up to $150,000 is available for Lake County in the form of a planning grant aimed at allowing the county to form a “cannabis equity” program.
Following the adoption of the California Cannabis Equity Act of 2018, the state has set aside millions of dollars in funding to allow local jurisdictions to create economic programs that seek to encourage people who fit into demographics that have been identified as having been disproportionately negatively impacted by the prior illegal status of cannabis to participate in, and benefit from the legal cannabis industry.
As written, the act intends to “ensure that persons most harmed by cannabis criminalization and poverty be offered assistance to enter the multibillion dollar cannabis industry as entrepreneurs or as employees with high quality, well-paying jobs.”
People of color and those living in communities with lower-than-average income levels, among other demographics, are generally able to receive benefits from the equity programs. Benefits of the programs can include things like subsidized technical support, regulatory compliance assistance, and help securing the capital necessary to start a business.
But not all jurisdictions with populations that might qualify for benefits have set up their own programs. So the state has released a solicitation for applications from such places.
“From initial research, it’s pretty clear that Lake County would qualify,” Sullivan said. County staff must complete an application for the funding by March 9.
The planning grant funds—named “Type 1” by the state—for which the county is now applying, are, as Sullivan noted, limited to $150,000. But “Type 2” funds, which can be applied for to cover the ongoing costs of an established cannabis equity program, are distributed in larger amounts.
Sullivan estimated that if successful in its Type 1 application now, by next spring the county could apply for a Type 2 grant, which may top $1 million. Sullivan noted the state is growing its investment in its cannabis equity grants, noting that the total funding for the programs from the state increased from $10 million to $30 million this year.
Erin McCarrick, a cannabis grower from the Clearlake area, said she strongly supports the county applying for the grants, and noted that a cannabis equity program could increase cannabis permit applicants locally.
Also on Tuesday, the board discussed but did not reach a conclusion on how to spend its existing $1.3 million of cannabis cultivation tax revenues and similar, future revenues.
District 2 Supervisor Bruno Sabatier called for an elimination of the county’s practice of prorating cannabis taxes based on what part of the year a a would-be grower receives their permit.
“My belief is, if they harvest one year, they should be paying $1 per square foot for the square footage of their harvest,” Sabatier said, referring to the tax rate for outdoor cultivation. Sabatier argued that basing taxation for growers on the number of days within a year they are permitted is not ideal.
Cannabis industry professional Mike Mitzel countered, arguing that the proration “works,” and that eliminating it won’t necessarily maximize the county’s taxes. “You’re not really going to end up collecting more tax on it,” Mitzel said.
Lake County First 5 Director Carla Ritz lobbied for some of the existing cannabis tax revenue to be used for drug safety initiatives targeted at youth, and asked the board to “please consider a broader understanding of the language included in the ordinance” to accommodate such initiatives.
District 5 Supervisor Rob Brown said, referring to cannabis cultivation tax revenue: “Whatever money we have, we should spend it.”
