Several ranchers from South County appeared at the March 6 board of supervisors meeting to plead their case for the board to approve the county’s cannabis cultivation ordinance when it eventually comes back before them.
Lee Scazighini said he was there to show support of cannabis farming in South County, in the Hernandez Valley area, where he has an 800-acre ranch.
“My ranch has been in the family since 1939,” he said. “My mother’s family settled there in the 1800s. It’s never been easy to make decent living on our ground. We run a small cow-calf operation and lease out our hunting rights.”
Scazighini said the last 10 years, in particular, have been difficult due to the on-going drought and a decline in wildlife.
“Many of our neighbors and friends have been pressured to sell out to billionaire ranchers,” he said. “We feel that the cannabis growing business will be, for us, a good thing. If we could grow just a few acres, far away from any county roads, to make thousands [of dollars] and possibly millions down the road to the county for roads. Research shows that our climate in the Hernandez Valley over to the Fresno County line, we can grow some of the best cannabis in the world.”
He urged the supervisors to consider his plea as a win-win for the community. He said if the board passes the ordinance soon it will allow them enough time to obtain their licenses and permits, and start planting.
Lee’s wife, Cheri, who has lived on the ranch since 1998, told the board that on their ranch they have dealt with poachers and illegal drug operations for years. She said when they notified law enforcement about the illegal drug grows it took them weeks and even months before they showed up.
“In the meantime, I was raising a young child and there was very little protection for us,” she said. “We have worked very hard on the ranch to be as self-sufficient as possible. We have gardens and orchards, and have raised chickens, run cows and a hunting club. We’ve sold fire wood to make ends meet, yet I still had to get a job in Coalinga so we could afford medical insurance.”
She said her husband and two neighbors ran electricity three miles to their homes in 1995. She said he is a long-time resident and his heart and soul are in the land.
“Now that it is legal to grow cannabis we have an opportunity to make a living off our ranch,” she said. “We’re asking to do what the cartels have been doing illegally around our property for years. We’d like to be able to make enough money to put our daughter through college and to go off the grid completely in order to fulfill our dream of being self-sufficient on the ranch we love.”
She told the board the roads are terrible where they live and there is no law enforcement.
“The taxes you collect off legal cannabis could provide us with better roads and more law enforcement,” she said. “Please consider letting us grow in South San Benito County.”
Father and son, Richard and Doug Burkett described themselves as historic ranchers whose family has worked the land in South County since 1934. Doug said cannabis can be a godsend for their ranch.
“There’s quite a few of us in South County here representing our area to ensure a mutual agreement that we will be able to do what we want to grow [cannabis] instead of working our asses off and barely making it each year,” Doug said. “This can be a great opportunity for us and a great opportunity for you guys. We’ve got no problem paying our taxes and you can make money, also.”
Richard Burkett told the board that his grandfather established the ranch and that his son was a fourth-generation rancher.
“We’ve gone from turkeys at that time  to hogs to cattle, and that’s what we currently do, a cow-calf operation,” Richard said. “It is tough. This drought has taken its toll on our grazing lands. We can’t raise as much cattle as we’d like to be able to do. I finally came over to the other side in realizing that this is a great opportunity, not only for the ranch, but the tax revenue that this could generate for the county.”
Richard said they and other ranchers keep to themselves and they don’t foresee any problems for the county if they were allowed to grow cannabis.
“If the sheriff’s worried about being able to get down there, well there’s only one way to Coalinga and one way out to King City,” he said. “So they [illegal operations] can be tracked down rather quickly. You just can’t get out of that area. So, we hope the county would reconsider and look at us as being able to create some revenue for the county.”
None of the supervisors addressed the ranchers’ concerns, but later Supervisor Jerry Muenzer, whose district includes the area where the ranchers are located, told BenitoLink that the county continues to work to craft an ordinance that will allow property owners to cultivate cannabis without infringing upon the rights of their neighbors.
When asked if he thought as isolated ranchers their situation is any different than landowners closer to communities in the county, Muenzer said they are no different than anyone else.
“They have neighbors that may or may not be in favor of cannabis being grown next to them,” he said, “Where I learned that there is always an issue is before I was elected I was going to Planning Commission meetings and a representative of the Quien Sabe Ranch that owns most of the hills east of Hollister wanted to do some hunting lodges and a neighbor registered a protest. So, no matter how big your ranch is, there’s always a neighbor that may or may not have objections about what you want to do.”
Perhaps by coincidence, one of the agenda items the board would discuss later in the meeting and unanimously pass was a resolution to submit to voters for the statewide general election in June an ordinance to impose taxes on cannabis businesses.
When the agenda item concerning taxation came up, Louie Valdez, county analyst, reminded the board that on Dec. 12, 2017, they adopted an ordinance prohibiting cannabis businesses in the unincorporated area of the county. The board also directed county staff to come up with ways to mitigate known and unknown impacts of cannabis business through cost recovery (fees) and revenues (taxes), as well as, to continue to develop a cannabis business ordinance to bring back to the board.
Then on Feb. 20, 2018, the board gave directions to the staff to move forward with an ordinance and resolution to place a cannabis business activities tax measure on the June 5, 2018 ballot. The ordinance and resolution were drafted to reflect tax policy decisions by the board on March 6.
After a lengthy discussion, Supervisor Mark Medina commented that he wanted the ordinance on the June ballot because even though it is taxation, people realize it is only a tax on the cultivation of cannabis.
“I do want this on the June ballot, then we can proceed with the ordinance and we’ll have buy-in from the residents and not just the board members deciding on an ordinance of the whole cultivations process,” he said.
Board Chair Anthony Botelho said that while further discussions on the cultivation ordinance are coming it is important to establish revenue streams now to provide services.
“Cannabis is not going to solve our problems by itself,” he said. “It’s just one revenue stream. With support for this tax it will send a message to continue to move forward with an ordinance.”
The cultivation ordinance was supposed to come back before the board in April, but Muenzer told BenitoLink that might not happen.
“It may be June or July before it comes back to us,” he said. “Part of the problem is it is complicated. We have to get it aligned with our new General Plan and the land-use elements. It didn’t pass muster with the Planning Commission. Also, we don’t have a lot of staff. They’re spread pretty thin.”
According to county documents, if approved by voters, the local Cannabis Business Activities Tax Measure would be in addition to the State’s tax on cannabis businesses. Relevant state provisions are:
1. Dry Weight Tax: $9.25 for every ounce of cannabis flower and $2.75 for every ounce of cannabis leaf. As the price of cannabis drops, a fixed amount represents a higher percentage of taxation per sales transaction. For example, if an ounce of flower sells for $200 the $9.25 tax results in a 4.63% tax. If, or maybe when, the price of an ounce of flower drops to $100 an ounce, the same dry weight charge of $9.25 is now a 9.25% tax. 2. 5% Excise Tax: 15% tax on all other cannabis activities. This is in addition to existing retail sales taxes.
2. The State of California makes no distinction between commercial recreational or medical cannabis.
3. The end consumer can avoid state and local sales tax if they possess a State issued Medical Marijuana Card. None of the other taxes are waived.