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The San Benito County Board of Supervisors will discuss on Feb. 24 whether to place a cannabis tax reduction measure on either the June or November ballot. The proposal, backed by all five supervisors, aims to attract legal cannabis growers and boost county revenue, which didn’t happen when cultivation was first allowed and the first tax rates were set eight years ago.
Putting the measure on the ballot, Principal Administrative Analyst Dulce Alonso said, would cost between $30,000 and $40,000.
“Society as a whole has become more accepting of cannabis as an agricultural commodity,” supervisor Kollin Kosmicki said at a Feb. 10 meeting. “The question you have to ask yourself is, would you rather have more legal growers or more illegal growers? This is promoting more legal growers in our community.”
The idea to lower cannabis taxes has been cooking for more than a year. Though the county first allowed cannabis cultivation and sales in 2018, six years passed without a single legal grower taking root. The tax structure charged any businessperson or entity engaged in cannabis cultivation in the unincorporated areas of the county an annual tax of $3 to $17 per square foot. Other cannabis businesses—distribution, manufacturing, laboratory testing, microbusiness, and retail—are each taxed differently, ranging from 0.5% to 8% of gross receipts per fiscal year.
Although that tax structure was sold as a promise back then, it turned out to be so high that it didn’t attract any growers, Kosmicki said.
“The tax rates that were set eight years ago were set at a level that is completely unviable,” he said. “There’s no reason to have cannabis cultivation or any of these businesses, if you’re going to have a tax structure that essentially tells those growers and businesses that we don’t want you here.”
To fix that, by late 2024, the supervisors decided to ask voters in 2026 to reduce the cannabis cultivation tax rate, a growing trend among California counties. In the meantime, the board created a temporary exemption for cannabis cultivators that began in February 2025 and will remain in effect through the end of 2026, while taxes on all cannabis businesses remain the same. Since then, four cannabis cultivators have been approved; one more is pending.
Orso Farms Managing Partner Jordan Blancarte, one of the new growers, told the board the change made it possible to establish crops in the county. “We’re able to invest here and create jobs here because of the temporary tax exemption,” Blancarte said.
Supervisors Mindy Sotelo and Angela Curro said the measure should be placed on the June ballot. “It’s all about turnout,” Curro said. “You have more people who come out to vote on specific issues they are passionate about.”
Blancarte said June would also be better for cannabis growers. He noted that November would come just one month before the exemption expires, leaving growers little time to plan.
“For us, operationally, placing this on the June ballot would give us a little bit more clarity and certainty for our long-term planning,” he said. “Cannabis truly functions like an agricultural commodity. The cost comes first and the revenue comes last. So that’s why it’s important you know the right tax structure.”
To make it to the June ballot, the board must submit a resolution to the elections office by March 6.
A special committee, made up of Kosmicki and Supervisor Dom Zanger, was created on Feb. 10 to study the issue alongside stakeholders, examine what tax rate to propose to voters and which ballot to target. The committee will present its findings at the Feb. 24 supervisors’ meeting in the county chambers at 9 a.m.
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