Local resident speaks against cannabis tax

While local resident and Lassen Municipal Utility District Assistant General Manager Pat Holley wouldn’t say whether he outright supports the federal legalization of cannabis or its rescheduling, Holley described himself as “a libertarian at heart,” saying, “I believe people should have the right to do whatever they want.”

However, he then relayed his hesitation to support the county’s proposed cannabis business tax measure, citing existing problems with its federal scheduling, confusing state regulations, enforcement of impaired driving and federal banking issues.

Holley thought the county’s measure was “premature” and “not thought out,” saying the efforts to allow cannabis commercialization within the county would be like “putting the cart before the horse.”

Holley described the measure as a mechanism that would give “illegal marijuana growers license to and room to run” saying the measure would “minimize enforcement” by taxing “illegal grows.”

Holley cited a cannabis ordinance already in effect within the county and said there was “ample opportunity for medical marijuana,” which he says, “gives you a great latitude to do what you want.”

The current Lassen County ordinance, Ordinance Number 2017-004, reads, for those growing outdoors, a limit is set to a single continuous 250 square foot area located on the premises and fully enclosed by a fence of substantial construction, setback 50 feet back from all exterior property lines. Indoor cultivation is limited to six indoor plants.

Holley claimed to be in support of “medical marijuana” because of his experience with a friend who utilized medical cannabis to help with the treatments of chemotherapy for their “advanced cancer.”

However, Holley went on to describe those in the industry as having a “completely different culture,” and described those in the industry as “taught to use guns, razor wire and attack dogs to defend their marijuana grows.”

Holley stated that the first step in changing the culture would be “federal action” to clean up the banking standards around cannabis businesses.

“When banking is allowed; when the industry can come out into the light of day and be properly regulated, then is the time that we should become involved in it,” said Holley.

Holley stated he knew first hand the banks within the county would not take “money from an illegal operation,” citing federal banking standards. He said, “Without the banking … it creates a situation where the money winds up in the hands … of basically criminals.”

Holley isn’t wrong about the banking standards. Because the federal government classifies cannabis as a Schedule 1 drug, federally insured institutions cannot process cannabis-related transactions without the risk of facing money-laundering charges.

This fact has led to cannabis shops in need of much improved security; largely operating on a cash-only basis, paying taxes with money carried around in armored vehicles.

Holley also stated the county treasurer has said the accepting of cannabis business funds would “create problems for managing funds for the county.”

Holley said, because of these challenges, “If these proceeds from marijuana sales are taken into county coffers, then it threatens funding for schools. It threatens the way that funds are managed by our county.”

Holley spoke about the October 2017 and January 2018 efforts in Calaveras County to recall county supervisors — who were both for and against cannabis. All three recalls did not go to a vote.

The divisive cannabis debate and the ban on commercial activities in Calaveras County were central issues in all the recent recall events.

Holley said that those in the industry were “dangerous people” and shared an anecdote from a former grower in Tehama County named Kevin Neal, who left five people dead and 10 wounded in 2017, before he died in a shootout with local police in the rural community of Rancho Tehama Reserve.

Holley said if the county was to “go down the road of … minimizing the enforcement of marijuana abatement regulations by allowing taxation of illegal operations, then we’re making a decision that we want to see all these people come into our community.”

Holley also claimed during the interview that under current cannabis cultivation in California, there were “no pesticide residue or chemical testing;” however, California mandated testing for pesticide residue in cannabis products at the beginning of July. The new California laws require any cannabis products sold by retailers to have undergone both quality and pesticide testing.

Whereas from this past January to June 30, regulations mandated testing for 21 pesticides and for microbial contaminants, such as E. coli, the number jumped to 66 in July. The regulations also instituted new quality standards to analyze products for contaminants, such as feces, mold, and insect and rodent parts. The quality bar will jump again in December, when testing must also look for mycotoxins, terpenoids, and heavy metals.

The price for a failed test is steep; if a product batch fails two assays, the state will require the entire batch to be destroyed.

In addition, cannabis retailers across the state had to restock their shelves, beginning July 1, with only products that had undergone the new, more stringent, evaluation.

However, Holley asked a question to the county: “How much do we really need? Do we need a few pounds a person for medical uses … or do we need tons?”