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 limited-English-speaking populations.
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.
Monterey Herald
By James Herrera
May 18, 2022
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