A new cannabis canopy tax is on the table in Humboldt County, California. It follows two key principles of tax policy: Tax things you can measure, and collect early.
I. Tax things you can measure
The square footage of area under cannabis cultivation is something you can actually measure. (I’ll use “canopy” here is a shorthand approximation of cultivation area.) Some canopy, you can measure from the air. And some you can even find on Google maps.
Four of the first marijuana taxes in history, the 2010 wave of taxes in Albany, Berkeley, Long Beach, and Rancho Cordova, California, were based square feet of operations. Having the government measure the area being farmed is nothing new. For years, starting in the 1930s, U.S. tobacco farmers were allowed to grow on only a specified land area.
Sure, canopy is a crude way to tax cannabis. Taxing THC might be just right, in theory, as the RAND Vermont report points out. But we can’t measure THC reliably even for concentrates yet. And trying to tax bud (flowers) by THC is futile – like taxing tobacco by tar and nicotine content, which no one does. Yes, canopy doesn’t correlate well with THC, but you can measure it. And a canopy tax, in the long run, will probably be just one of several taxes on cannabis.
OK, indoor grows can’t be easily detected from the air, so the most environmentally unfriendly operations may have the easiest time evading tax. But we can figure out who is using electricity, and there are other ways to detect indoor growing. Continue reading “Humboldt’s Principled Cannabis Tax”