Sec. 35-5. - Tax imposed.

There is established and imposed a cannabis business tax at the rates set forth in this chapter. Every person who is engaged in commercial cannabis business in the unincorporated area of the county shall pay an annual cannabis business tax.

(a)

Tax on Commercial Cannabis Cultivation.

(1)

Every person who is engaged in commercial cannabis cultivation in the unincorporated area of the county shall pay an annual commercial cannabis business tax either: (1) at a rate of up to ten dollars ($10.00) per square foot of outdoor cultivation area, twenty-two dollars ($22.00) per square foot of mixed-light cultivation

area, and thirty-eight dollars ($38.00) per square foot of indoor cultivation area, or (2) at a rate of up to ten percent (10%) of gross receipts per fiscal year. When the rate is determined on a square footage basis, on July 1 of each fiscal year succeeding the year of imposition of a square footage based tax on commercial cannabis cultivation, the amount of the tax shall be increased by the most recent change in the annual average of the Consumer Price Index ("CPI") for all urban consumers in the San-Francisco-Oakland-San Jose areas as published by the United States Government Bureau of Labor Statistics. However, no CPI adjustment resulting in a decrease of any tax imposed by this subsection shall be made. The tax under this subsection shall not be imposed unless and until the board of supervisors, by ordinance, takes action to: (1) specify whether the tax on commercial cannabis cultivation will be imposed on a square footage or gross receipts basis, and (2) set a tax rate not to exceed the maximum rates established herein.

(2)

For cultivation license types based on plant count, the square footage based tax will be calculated using up to one hundred (100) square feet per plant allowed under the permit.

(3)

Notwithstanding the maximum tax rate established in subsection (a)(1), the board of supervisors may, in its discretion, at any time by ordinance, implement a lower tax rate for all persons engaged in commercial cannabis cultivation in the unincorporated area of the county or establish differing tax rates for different categories of commercial cannabis cultivation, including commercial cannabis cultivation for medical or adult use, subject to the maximum rate established in subsection (a) (1). The board of supervisors may, by ordinance, also increase any such tax rate from time to time, not to exceed the maximum tax rate established in subsection (a)(1). Notwithstanding the maximum square foot per plant established in subsection (a)(2) for cultivation license types based on plant count, the board of supervisors may, in its discretion, at any time by ordinance, implement a lower square footage per plant, and may, by ordinance, also increase such square footage from time to time, not to exceed the maximum square footage established in subsection (a)(2).

(4)

Pursuant to subsection (a), the commercial cannabis business tax on commercial cannabis cultivation is to be imposed on a square footage basis, and is set at the following rates, with permit types as defined in Chapter 26 of the Sonoma County code:

Permit Type Rate Per Square Foot

Outdoor $0.36

Mixed-Light $1.15

Indoor $3.00

(5)

Pursuant to subsection (a), the square footage based tax for cultivation license types based on plant count will be calculated using 25 square feet per plant allowed under the permit.

(6)

Notwithstanding Subsection 35-5(a)(3), the board of supervisors shall not increase the tax rates set forth in Subsection 35-5(a)(4) or the square feet per plant set forth in Subsection 35-5(a)(5) until July 1, 2019, at the earliest.

(b)

Tax on All Other Commercial Cannabis Business.

(1)

Every person who is engaged in commercial cannabis business, including but not limited to as a distributor, distribution facility, testing laboratory, transporter, manufacturer, nursery, dispensary, or engaging in delivery of cannabis in the unincorporated area of the county shall pay an annual commercial cannabis business tax at a rate of up to ten percent (10%) of gross receipts per fiscal year. The tax under this chapter shall not be imposed unless and until the board of supervisors, by ordinance, takes action to set a tax rate not to exceed the maximum rates established herein.

(2)

Notwithstanding the maximum tax rate established in subsection (b)(1), the board of supervisors may, in its discretion, at any time by ordinance, implement a lower tax rate for all persons engaged in commercial cannabis business in the unincorporated area of the county or establish differing tax rates for different categories of commercial cannabis business, including commercial cannabis business for medical or adult use, subject to the maximum rate established in subsection (b)(1). The board of supervisors may, by ordinance, also increase any such tax rate from time to time, not to exceed the maximum tax rate established in subsection (b) (1).

(3)

Pursuant to subsection (b), the commercial cannabis business tax on commercial cannabis business is to be imposed on a percentage of gross receipt basis, and is set at the following rates, with permit types as defined in Chapter 26 of the Sonoma County code:

Operator Percentage of Gross Receipts

Manufacturer 1.5%

Transporter 0%

Distributor 0%

Cannabis Nursery 0%

Dispensary 3%

Testing Laboratory 0%

(4)

Notwithstanding Subsection 35-5(b)(2), the board of supervisors shall not increase the tax rates set forth in Subsection 35-5(b)(3) until July 1, 2019, at the earliest.

(Ord. No. 6515, § II, 5-6-2025; Ord. No. 6471, § II, 4-30-2024; Ord. No. 6433, § II, 5-23-2023; Ord. No. 6374, § II, 4-19-2022; Ord. No. 6203, § II, 6-13-2017; Ord. No. 6188, § 5, 12-13-2016)