The Sonoma County Board of Supervisors is set to lower the cultivation tax on cannabis growers in unincorporated areas.
Sonoma County cannabis growers will see some relief at the pocketbook, as the Board of Supervisors on April 15 approved a reduction in local tax rates for cultivation in unincorporated areas. The amended Cannabis Business Tax Ordinance will lower cannabis-grow tax rates equivalent to 2.5% of gross receipts, converted to a square footage rate, according to county officials.
The amendment follows an annual review of market changes and data reported by local operators; local cannabis tax rates for retail and manufacturing operations in unincorporated areas will remain the same.
The revised rates for cultivation in unincorporated areas are as follows:
- $0.36 per square foot for outdoor cultivation
- $1.15 per square foot for mixed-light cultivation
- $3 per square foot for indoor cultivation
Measure A, which established the Cannabis Business Tax, was passed by voters on March 7, 2017, with 71% voter approval.
To gather data to conduct the annual cannabis tax rate review, county staff sent a questionnaire to all 66 permitted cannabis cultivation operators. Participation in the questionnaire was voluntary; 13 responses were received representing 20% of the total number of cultivation businesses in the unincorporated county cannabis industry, the county reported.
Cannabis program costs are funded by cannabis business tax revenue. “Due to declining revenue, the program has had to use fund balance to maintain program operations,” county officials said in a statement. According to the county, the overall cost of managing the cannabis program is projected to be $1.7 million for the next two fiscal years. Cannabis business tax revenue in fiscal year 2025-26 is projected to be $700,000.
The amended Cannabis Business Tax Ordinance, which will go before the Board of Supervisors for final approval on May 6, 2025, will be effective July 1.
