Proposal to lower cannabis tax rate for Del Norte County retailers failed; tax currently affects a business | Wild Rivers Outpost



Jessica Cejnar Andrews / Today at 4:58 pm / Cannabis, Local Government

Proposal to lower cannabis tax rate for Del Norte County retailers failed; Tax currently affects a business


Del Norte County District 2 Supervisor Valerie Starkey has proposed reducing the cannabis tax rate to 2% for retailers, saying she believes the current 6% rate is excessive. LoCO file photo

After a failed motion to lower the cannabis tax rate for retailers, the owner of the only business that pays these taxes in Del Norte County has asked county supervisors to spend those dollars on youth disadvantaged, otherwise he would “resign”.

Robert Derego is the only cannabis retailer in county jurisdiction. His dispensary, Sticky Grove, is taxed annually at a rate of 6% due to Measure B, which voters approved in 2018. In the past four quarters, Derego’s business has generated $ 60,000 in revenue. county tax collector-treasurer Barbara M. Lopez said.

On Tuesday, after District 2 Supervisor Valerie Starkey said she felt the 6% tax rate was excessive, Derego said he didn’t mind paying him as long as those dollars were used for support young people in the community.

But when Starkey’s motion to cut the rate to 2% failed by a 2-3 vote, Derego doubled his request.

“You have to spend the funds on programs for disadvantaged youth or you won’t have the funds next year,” he said. “Do you understand that? You used to extort people. If you want $ 60,000 next year, it will be dedicated to youth groups.

Supervisors Gerry Hemmingsen, Bob Berkowitz and Darrin Short voted against the proposal to reduce the rate of the cannabis tax to 2%.

Hemmingsen’s motion to keep the cannabis tax rate at 6 percent for retailers was passed by a 3-2 vote with Starkey and Board Chairman Chris Howard dissenting.

Measure B, the Del Norte County Cannabis Tax Ordinance, imposes a 2-6% tax on the gross receipts of adult cannabis retailers and a 1-3% tax on cannabis manufacturers county, according to Lopez. The Supervisory Board sets these rates annually. The income goes to the county general fund, Lopez said.

According to Lopez, the county has taxed cannabis retailers at 6% since the cannabis tax ordinance took effect. If that rate were reduced to 2%, the county would see about $ 19,900 in revenue, she said.

In response to questions from Starkey, Lopez said the county does not have a tax on liquor establishments and the city has not adopted a tax rate for retailers or manufacturers of cannabis.

According to Starkey, who spoke to City Manager Eric Wier, Crescent City Council chose not to set a tax rate when it drafted its commercial cannabis ordinance because it did not want to create a tax rate. ‘obstacles to doing business within the city limits.

Starkey also proposed to keep the cannabis tax rate for manufacturers at 3%, noting that this would not yet impact businesses.

“My proposal is that we do something less than 6 percent to see if we can’t help a business succeed here in the county,” she said.

Derego, who was part of the county committee that developed its approved commercial cannabis prescription supervisors in 2018, said he and his wife worked 80 hours a week and expected to make around $ 40,000. He pointed out that he was offering a 20% discount on online sales during the COVID-19 pandemic and that he was competing with dispensaries in Oregon and within the Crescent City limits.

When Measure B was on the ballot in 2018, according to Derego, supervisors decided that those dollars would go directly into the county general fund rather than spending them on a specific purpose, so it didn’t. only need 50% plus 1 of the votes to pass.

“I don’t think there is a rule for you to spend these funds,” Derego said. “I don’t think there is anything wrong with you now saying it’s dedicated, and if you kept it at 6% I wouldn’t mind if you put it towards Sunset High School or First 5 or one of the school district’s music departments. I’d be fine with that … “

Derego said he would like to see a proposal to spend retail cannabis tax dollars on a specific program by the next supervisory board meeting in January.

County attorney Joel Campbell-Blair said the supervisory board could spend those Measure B dollars on something specific, but it wouldn’t be permanent.

After the meeting, Derego told the Wild Rivers Outpost that he was seriously considering going out of business if the supervisory board decided not to spend his tax dollars on a program for underprivileged youth.

“Our lease expires in February and our license is in April,” he told the Outpost Wednesday. “For me, the idea of ​​growth stopped when (cannabis) was regulated, and after a while we did well because we were the only ones in town.”

According to Derego, when he was on the Cannabis Task Force to develop the county’s commercial cannabis ordinance, the county attorney advised adding a tax, saying county supervisors would be more willing to approve the order.

Derego also questioned the county’s previous purchases with taxpayer dollars, including a $ 26,000 virtual golf simulator.

Howard acknowledged Starkey’s sentiments and Derego’s request on Tuesday, saying “there is some truth” to Starkey’s claim that a 6% tax on cannabis retailers is a barrier to doing business.

“If we’re potentially causing damage, that’s something we have to consider,” Howard said. “We have a range (of tax rates) that we could experiment with or we could go another route, as our public comment suggested. But we have a fork put in place by our constituents and that’s something we need to consider here. “

The Del Norte County Commercial Cannabis Ordinance designated areas of the county where retailers, manufacturers and growers could locate. He also established setbacks between the cannabis business operations and schools.

In 2019, after finding that the ordinance accidentally established a monopoly in the urban area just outside the Crescent City limits, supervisors amended the ordinance to allow new commercial cannabis operations in the Smith River area. .

In January, supervisors approved a license for a commercial cannabis growing and manufacturing operation, Moving North LLC, at 205 Timber Boulevard, the former Triplicate Printing House.


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