To: Board of Supervisors
From: County Administrative Office
Agenda Section: Consent
Vote Requirement: Majority
SUBJECT:
title
Modifications to the County of Humboldt Project Trellis Cannabis Local Equity Program Manual
end
RECOMMENDATION(S):
Recommendation
That the Board of Supervisors:
1. Approve the proposed modifications to the County of Humboldt Project Trellis Cannabis Local Equity Program Manual (Attachment 2) retroactive to April 9, 2024.
Body
STRATEGIC PLAN:
This action supports the following areas of your Board’s Strategic Plan.
Area of Focus: A Diverse, Equitable & Robust Economy
Strategic Plan Category: 2001 - Promote strong economic resiliency and growth
DISCUSSION:
The Local Equity Program (LEP) is a business support program funded through state and local funding to support individuals seeking to remain or enter the legal cannabis market. Applicants must demonstrate eligibility through meeting the criteria defined in the Project Trellis Cannabis LEP Manual which define the previous negative impacts they must have experienced during the prohibition of cannabis and their current situation in the market.
On April 9, 2024, your Board voted to approve modifications to the Project Trellis Cannabis LEP Manual. These modifications changed the eligibility criteria to meet the states requirements to receive funding and directed grant awards to prioritize payments on behalf of awardees to pay past-due local cannabis excise taxes, Planning and Building fees, and property taxes. These grants were released on a first come first serve basis with priority of payment being made to obligations owed to the county before the release of funding to an individual.
During journal entry processing for property taxes, it became clear that direct payment of property taxes was excessively complex given the limited funding, government code dictating rules on property tax payments and restrictions from the state on paying interest and fees on past due tax bills. This is impacting four awardees in the prior round of funding that ended in October, 2024 (Attachment 5). The state has agreed to an extension of the funding for this grant round through March 31, 2025, however, a retroactive amendment is required to the LEP. To address this, LEP modifications are being requested to allow for update or amending of contracts as needed and to shift the funding allocated to be paid on their behalf for property taxes and reallocate it to be paid directly to the applicants contingent upon the use of the funding to pay their property tax obligations to the Treasurer-Tax Collector.
LEP recommended modifications include:
• Remove the requirement that property taxes be current or on an established payment plan.
• Remove the provision that program staff will provide payments on behalf of applicants for past-due property taxes.
Applicants will still need to ensure that Measure S Cultivation Excise associated with cannabis business activities are current or demonstrate enrollment in an approved payment plan with the Treasurer-Tax Collector’s Office before submitting a Project Trellis application to be eligible.
SOURCE OF FUNDING:
State Cannabis Equity Grant Funding (1175-275422)
FINANCIAL IMPACT:
The LEP is funded by state Cannabis Equity Grant Funding in Fund 1120, Budget Unit 1120-275422 - Trellis Equity. These changes will have little financial impact as it will just require staff time to amend the four impacted contracts. if approved it should simplify the process and limit staff time commitments in the future as it relates to property taxes.
STAFFING IMPACT:
There are no changes to staffing levels at this time. These changes will positively impact staff time by eliminating the need for journal entries to process payments to the Treasurer-Tax Collector for overdue property taxes.
OTHER AGENCY INVOLVEMENT:
California Governor’s Office of Business and Economic Development
ALTERNATIVES TO STAFF RECOMMENDATIONS:
Your Board could choose not to approve these changes to the Project Trellis Cannabis LEP Manual. However, this is not recommended as it will not allow for payment to the four impacted awardees
ATTACHMENTS:
1. LEP Version 2.3, 2024
2. (Draft) LEP Version 2.4, 2025 Redlined
3. (Draft) LEP Version 2.4, 2025 Final
4. Resolution 24-279
5. CEG Award Agreement 556
PREVIOUS ACTION/REFERRAL:
Meeting of: Apr. 9, 2024
File No.: 24-279