SYSTEMIC CHANGES URGED FOR CANNABIS PROGRAM
SALINAS >> A Monterey County civil grand jury report determined the Monterey County Cannabis Program has lapses in transparency, oversight and analysis that need to be addressed, concerning the crop that has an estimated $484 million market value.
The civil grand jury investigates and provides reports on the operations of local government in Monterey County, including the county, cities and the numerous special districts that exist to serve the residents of Monterey County. The jury consists of community volunteers tasked with ensuring the best interests of all citizens of the county are being met.
The report. entitled “Monterey County's Cannabis Industry Up In Smoke,” says that in interviews with various County officials, the civil grand jury learned that one of the most significant new sources of revenue for the county was the new cannabis tax, specifically the new tax on cultivation.
“In just a few years, cannabis production had grown into a crop with a market value of $484 million in 2021, according to the County Agricultural Commissioner,” said the report in part. “That makes cannabis one of the top three most valuable crops in the county. Monterey County ranks as the fourth largest legal producer in the state.”
Yet there is no comprehensive, consistent reporting on the entire county's cannabis tax revenue and spending. Information is scattered among numerous sources and reports, the grand jury found.
The civil grand jury calls for more comprehensive and regular reporting to the public on all aspects of the county's cannabis program including mixed-light indoor grow, cannabis tax revenue, economic development impacts and concise allocation reporting.
The civil grand jury analysis has determined that the Cannabis Tax Fund has collected $69.7 million since its inception. The Cannabis program budget plus the documented allocations since 2016 total $61.7 million with a remaining amount of $8 million. The rolling balance at the end of each year or its current balance was not provided to the grand jury. The cannabis tax revenue has grown into the second-largest tax source for the County general fund.
While tracking cannabis taxes and spending was difficult, determining the economic impacts of the new cannabis industry was impossible. One of the primary stated reasons for legalization was economic development, but the county has done nothing to examine the economic impacts.
The report says the civil grand jury could find no clear, consistent process for how one-time allocations of cannabis revenue award requests are brought before the Board of Supervisors, such as $20,000 for a Prunedale senior center, $158,740 for a Salinas homeless shelter, $250,000 for a Salinas soccer center and $929,000 for an emergency women's shelter. At the height of the pandemic, the Board of Supervisors allocated $16 to $18 million from the Cannabis Tax Fund on measures to help deal with the crisis, including $500,000 to the Food Bank for Monterey County and almost $3 million for a community outreach program to provide vital coronavirus information to vulnerable and limitedEnglish-speaking populations.
The civil grand jury calls for more comprehensive and regular reporting to the public on all aspects of the county's cannabis program including mixedlight indoor grow, cannabis tax revenue, economic development impacts and concise allocation reporting.
The grand jury recommended that the following be implemented by Dec. 31: The Monterey County Cannabis Program be required to provide a comprehensive annual report detailing all Cannabis Tax Fund revenues, allocations and reserves. The Monterey County Cannabis Program web page should be revised to include easy-to-follow directions for accessing revenues and expenditures. Monterey County monitor and reports on improved property value and tax reassessment due to cannabis compliance regulations. The Cannabis Program annual report include an accounting of all full-time employees funded by the Cannabis Tax Fund and the Cannabis Program adopt a consistent process for inspection and checklist. The grand jury recommended that by June 30, 2023, the county economic development manager be directed to complete a study on new jobs created by the cannabis industry and its impact on the local economy.
The Monterey County civil grand jury requires a response by law from elected county officials, including the auditor/controller, and the assessor/clerk/ recorder, within 60 days, and from the Monterey County Board of Supervisors within 90 days. It also invites responses that are not required by law from the Monterey County Cannabis Industry Association, the Monterey County Cannabis Program Manager, and the Monterey County Economic Development Manager.