County to Overhaul Cannabis Taxes
Amnesty offered on penalties and interest on delinquent taxes provided they are paid by 2028
The Mendocino County Board of Supervisors on Tuesday approved a sweeping plan to restructure the county’s cannabis tax system, voting to write off millions of dollars in delinquent debt and eliminate controversial “true-up” minimum payments,.
The 3-2 decision followed a heated debate over fiscal responsibility and the survival of the county’s legal cannabis industry. The board authorized writing off all cannabis business taxes from the 2018-19 cycle as uncollectible, as well as delinquent taxes owed from 2020 through 2024 by cultivators who have since left the program.
Auditor-Controller Treasurer-Tax Collector Chamise Cubbison told the board that while the total amount of delinquent taxes from inactive participants is unknown, it could exceed $2 million. Cubbison argued that pursuing the debt is not a “viable option” because the tax collection system was never equipped for standard debt collection, lacking social security numbers and dates of birth for many permit holders who do not own the property where they cultivated. The system also has not been tracking the total amount owed.
A central pillar of the reform is the immediate cancellation of the “true-up” minimum tax for the 2026 tax year. Under the previous system, cultivators were required to pay a minimum tax regardless of their actual harvest or income. Supervisor Ted Williams, a proponent of the change, characterized the minimum tax as an unfair burden on growers that could reach effective tax rates of 50% to 100% of their yield.
Critics of the move, including Supervisors Bernie Norvell and Madeline Cline, expressed concern over the message the amnesty sends to the public. Cline argued the county was creating a culture where “it’s okay to not follow the rules” and “not pay your taxes”.
Following the vote, Norvell said he wanted to clarify that he wasn’t against the amnesty but that there were too many unknowns about its impact on the budget.
The fiscal impact of the decision is significant. CEO Darcie Antle estimated that the county could lose between $900,000 and $1 million in budgeted revenue by forgiving the 2026 true-up, which historically accounts for roughly 65% of the county’s cannabis tax receipts.
Despite the revenue loss, the majority of the board viewed the move as a necessary step to align the cannabis industry with standard business taxation practices. Starting in 2027, all cultivators will move to a flat tax rate of 2.5% based on gross sales.
To bring the industry into compliance, the board also approved a new enforcement mechanism: starting in 2028, all cannabis business taxes must be paid in full to qualify for license renewals.
“We’re trying to clean that up and set the program off into a very clear direction,” said Supervisor John Haschak, who moved the recommendation.
The board’s action also includes an amnesty period for interest and penalties on existing delinquent taxes for those still active in the program, provided they are paid current by January 31, 2028.
Read additional coverage of the May 5 Board of Supervisors Meeting:
Mendocino County Projects Balanced Budget with Reduced Reliance on One-Time Funds
Proposed Ukiah Annexation Could Cost Mendocino County as Much as $27 Million Over 16 Years
Mendocino County Supes Votes to Cancel Solar Project
Mendocino County Sheriff Warns of Staffing Shortages, Safety Risks