First Of Its Kind
Aug 28, 2019 08:22PM
Humboldt County’s Project Trellis is the first government-led program of its kind for the cannabis industry. The venture aims to build equity and bolster the regional economy by reinvesting tax revenue from cannabis operations back into the industry. Project Trellis is designed to serve three primary functions including a micro-grant program, social equity, and marketing.
Scott Adair, Humboldt County’s economic development director, explains that Project Trellis was born from the need to assist cannabis operators in becoming sustainable. “Cannabis is a legitimate industry in California,” says Adair. “We regulate the industry; we require permits, licenses, and taxes just like any other business. Yet, we don’t offer the same levels of support that we do for other businesses.”
Project Trellis hopes to fill that gap.
County officials chose the moniker as a metaphor for upward growth; a trellis supports the vertical development of plants via rails or stakes-just like Project Trellis aims to do for Humboldt County.
THE TAX MAN TAKETH. AND GIVETH BACK?
Project Trellis will be partially financed by revenue from Humboldt County’s Measure S excise tax, explains Adair. Voters approved the measure, which imposes a $1–$3-per-square-foot tax on commercial cannabis operations, in 2016. Revenue is used to improve public safety, mental health services, and more.
According to the office of economic development, county excise tax revenue is projected at $8,010,000. Ten percent of those funds ($801,000) will be diverted to Project Trellis to be divided among its “rails.”
County officials have also applied for additional funding from the California Cannabis Equity Act of 2018, also known as Senate Bill (SB)1294. The equity act sets aside $10 million for local social equity programs and authorizes the state’s Bureau of Cannabis Control (BCC) to award those monies. But shortly after Humboldt County applied, the BCC cancelled its submission period. The BCC has stated it will reopen once guidelines are revised; if approved, Humboldt County would receive a minimum of $100,000.
“It’s a relatively new idea to take funding and give it back,” says Adair. “We felt it was necessary. The county receives a significant portion of revenue from the cannabis industry. That revenue helps to pay for road improvements, public services, and more,” explains Adair.
Revenue from fees and penalties, like code enforcement violations, will also go toward Project Trellis. The amount depends on what (if any) the county receives from SB1294. “We want the local industry to be healthy and solvent and make it through the challenging phase of going from a black market to [a] bona fide, genuine legal market,” says Adair. “It adds economic vitality to the region as a whole. … We don’t want to see it go away.”
Microgrant and Loan Program - 25 percent ($180,225) of the diverted excise tax revenue + funding from fines, fees, and SB1294.
This program is designed to make funding available to local businesses. Funds will be awarded in $5,000 to $50,000 increments and will be used to support “good actors,” the state’s term for responsible operators participating in the legal market. Adair says awards could be used for anything from land acquisition to infrastructure to swapping gas for solar. Larger sums will be awarded to scalable projects, such as co-ops. Smaller sums will be issued to individuals who meet the program’s criteria.
Eligibility is determined by the Cannabis Advisory Board, which is currently being developed. The board will consist of seven members one representative will be selected from each district while two members will be chosen from the community. Applications are being accepted now.
Local Equity Program - 15 percent ($108,135) of excise tax funds + funds from SB1294.
Humboldt’s Cannabis Local Equity Program (CLEP) serves those adversely impacted by the drug war. Eligibility and services are outlined in the county’s CLEP Manuel. Those who qualify are eligible for fee waivers, deferrals, loans, business development assistance, and job training.
A key distinction of the program is that applicants must apply as individuals not companies and meet a series of qualifications, including being a board member of a non-profit cannabis business.
Adair explains that Humboldt County’s unique history requires a model that serves longtime operators, colloquially known as “legacy growers,” and those affected by raids, including Operation Green Sweep and CAMP.
Adair led efforts to develop Project Trellis. While working on his presentation for the Board of Supervisors at home earlier this year, his daughter peeked over his shoulder and asked why her father had included a photo from the Vietnam War. “It’s not,” Adair told his daughter. “The photo was actually from one of the raids that occurred in Southern Humboldt during the War on Drugs in the 1990’s.”
Marketing Initiative - 60 percent ($432,540) of excise tax revenue The initiative aims to increase demand for Humboldt County’s world famous cannabis.
The program will encompass a “proof-of-origin” stamp program, which could cost six figures annually, depending on the provider.
Businesses like the Uplift Cooperative could especially benefit from a county wide marketing initiative. Drew Barber, founder of Uplift, formed the co-op so members could combine resources and save money on shared costs like insurance and branding.
Marketing is “next to impossible to do ourselves,” at the small to medium scale of local operators, explains Barber. “There’s too much involved in running the farm and keeping in compliance.”
Barber’s sentiments have been echoed throughout Northern California as small farmers struggle to survive in California’s new billion-dollar industry.
Humboldt County operators have a valuable brand marketing it might just be their saving grace. Operators need help building their brand and solidifying the Emerald Triangle’s place in the international marketplace.
Humboldt County officials hope to implement Project Trellis by early 2020.