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After six years without collecting a dollar in taxes from cannabis cultivation, the San Benito County Board of Supervisors voted 4-1 on Feb. 24 to put a measure on the June 2 ballot to revamp the current cultivation tax structure. This move aims to shift the county from having one of the highest cannabis tax rates in California to having one of the lowest.
Supervisor Kollin Kosmicki, who was on a special cannabis committee, said the change could bring the county millions in tax dollars. Though the board approved the new measure, Supervisor Ignacio Velasquez warned that the county needs to charge enough to cover related costs.
Supervisors Mindy Sotelo and Angela Curro supported the proposed new rate. “We are in dire need of revenue,” Sotelo said.
When cannabis cultivation was approved in 2018, the board set the tax at $3 to $17 per square foot annually. By the end of 2024, not a single cultivator had established operations in the county. Supervisors temporarily exempted growers from paying the taxes in February 2025 until the end of 2026. Since then, four cultivators have been approved and one more is pending. Legal cannabis cultivation in San Benito County requires special permits and is restricted to specific areas.
“The 2018 tax rate was set at a level that’s just out of this universe—completely unviable for the industry,” Kosmicki said. “Voters have told us that they’re wanting this to be a legal product in our community. So the goal here is to promote that we want to provide a mechanism for legal growers to have an opportunity here.”
In recent years, counties across the state have been reducing the tax rates they set after voters approved recreational cannabis in 2016. The proposed measure in San Benito County would replace the square-foot tax with a per-acre rate ranging from $1,000 to $10,000 annually, which would be at least 13 times lower than the current rate. If voters approve the county measure, the supervisors will then set the final rate within that range.
Kosmicki said the new range was designed to give the board flexibility to adjust to market conditions without going back to the voters. He added that, after meetings with growers and industry stakeholders, a rate of about $2,000 per acre had been discussed. At that level, San Benito County would have one of the lowest cultivation tax rates in the state. A $2,000-per-acre rate equals less than five cents per square foot, far below California counties that tax per square foot rather than by gross receipts, such as Nevada (16 cents), Sonoma (36 cents), Lake (52 cents), Monterey (71 cents), Calaveras ($2), and unincorporated Los Angeles ($4).
If the rate is set at $10,000—the highest of the proposed range—only Nevada County would have a lower per-square-foot cultivation tax among counties that charge by area.
Velazquez was the only one who opposed the change. Though he’s in favor of reducing the overall tax rate, he suggested maintaining the per-square-foot measurement and placing it between 50 cents and $3. He said a rate so low wouldn’t be enough to cover the cost of having law enforcement around the farms. Hemp growers, whose crop is a non-THC variety of cannabis, have reported issues with trespassing and neighbors complaining about the odor.
“If we go too low, we’re going to find ourselves in trouble, we’re going to find out we’re subsidizing it,” he said. “I don’t want to be in that situation.”
“If we don’t adjust this and get the voters’ approval,” Curro said,” this cannabis ordinance is never going to bring any revenue into our community.”
Kosmicki and Supervisor Dom Zanger, who were part of the committee that met with stakeholders, argued that the new rates, even if they are not as high as they used to be, will bring millions of dollars to the county. Kosmicki said that if the maximum acreage allowed for cannabis cultivation is reached, it could generate between $2 million and $20 million, depending on the rate. That is more than double the amount Sonoma County projected for cannabis business tax revenue from its unincorporated areas for the current fiscal year.
The board will finalize the ballot measure language and submit it to the elections office by March 6, so it can appear on the June 2 ballot.
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