Board approves temporary cut to cannabis cultivation tax, tying review to market conditions
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Summary
After extensive public testimony and ad hoc analysis, the Board adopted an ad hoc recommendation to reduce cannabis cultivation tax rates by about 80% for 2026 and extended the reduction through Dec. 31, 2027, to allow a market‑data review; vote passed with one dissent.
Trinity County supervisors voted on Feb. 3 to reduce the cannabis cultivation tax for 2026 in response to a steep drop in wholesale prices, adopting the ad hoc committee’s recommendation with an extension of the special reduction through Dec. 31, 2027.
Supervisor Lutweiler summarized the committee’s work and financial modeling, saying wholesale prices have fallen sharply and that a fixed per‑pound tax now represents a much larger percentage of growers’ revenue. "If wholesale price is down by 80%, then we could reduce by 80%," Lutweiler said, describing the committee’s proposal to tie near‑term tax relief to market conditions.
Public comment was robust and divided. Growers and industry supporters asked the board to eliminate the tax entirely; some local residents and other supervisors cautioned against overruling a voter‑approved tax structure without broader public input. Holly Hayes, a licensed cultivator, said many growers asked the ad hoc for a 0% tax to survive this market downturn.
The board debated options including a temporary reduction, a one‑year versus multi‑year adjustment, and whether to encourage a voter measure to set future policy. The board ultimately approved the committee’s approach but extended the reduction window to two years to align with reporting periods and allow staff to track wholesale price data before any additional change.
Motion and outcome: The motion to adopt the resolution reducing cultivation tax rates for 2026 and extending that reduction through Dec. 31, 2027 passed by roll call; Supervisor Cox recorded a No vote; the motion carried by majority.
Budget impact and next steps: Staff estimated a potential $150,000–$170,000 reduction to next year’s projected program revenue and recommended direction to identify offsetting reductions. Staff will return with updated analysis tied to wholesale price tracking and will communicate existing payment‑timing adjustments and payment‑plan processes to cultivators.
Speakers quoted and sources: Supervisor Lutweiler (ad hoc presentation); ad hoc members Drew Plavani and Terry McBrayer; multiple public commenters including Holly Hayes and industry representatives.