Treasurer briefs board on complex cannabis tax program; ad hoc planned to weigh rate and collection options
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Summary
Treasurer reported data inconsistencies, manual collection issues, license backdating and market oversupply that leave many cultivators unprofitable under the county’s tiered tax; staff recommended an ad hoc to study options including rate reductions and system upgrades.
The county treasurer and tax collector presented a detailed status update on Trinity County’s cultivator and retail cannabis tax program on Dec. 17, describing operational challenges, compliance gaps and market dynamics that have reduced taxable transfers and produced notable delinquencies.
Treasurer Tara McBrayer told the board the county’s tax ordinance uses a unique tiered structure that taxes transfers by product type (flower, trim/leaf, fresh plant) and by weight tiers; retail sales are assessed as a percentage. Staff reported four main problems: (1) data mismatches between what cultivators report locally and what is recorded at the state level; (2) manual, labour‑intensive collection and reconciliation processes that the county’s current software does not fully support; (3) license backdating that complicates enforcement; and (4) market oversupply that has driven prices down so significantly — particularly for leaf/trim — that some cultivators may pay more in tax than they receive in sale proceeds.
The treasurer presented delinquency and compliance figures, noting that some accounts are delinquent because cultivators failed to submit required zero‑reporting even when they had no taxable transfers. She and staff described ongoing outreach, enhanced notices and the recent requirement that a surety bond or cash deposit be on file prior to licensing as steps that have improved compliance.
County counsel advised the board that a voter‑approved tax measure constrains changes to the tax’s structure (tiering must remain) but the board retains authority to reduce rates, even to zero for certain categories if it chooses. Staff recommended forming a public ad hoc including treasury and community development staff to gather input and model options (for example, eliminating tax on lower tiers or reducing certain product‑category rates) and to quantify the fiscal impact before any action.
Supervisors asked for additional breakdowns to measure the fiscal cost of possible rate changes and staff said they would prepare scenario analyses for the ad hoc. The board signaled support for establishing an ad hoc to review collection software options, compliance strategies and rate scenarios in early 2026.