Port Hueneme: Developing Cannabis Tax Revenue as a Budget Tool
Well-regulated cannabis businesses bring the same economic development benefits as other similar industries. In addition, cannabis taxes can generate much-needed revenue to help address local priorities. To maximize these benefits, cities and counties need a cannabis licensing and regulation program crafted by experienced professionals with a proven success record.
In 2016, the City of Port Hueneme was facing a budget shortfall of $1.2 million. The City was forced to suspend all capital improvement projects and started looking for new revenue sources to help it become solvent.
The City looked at allowing, regulating and taxing commercial cannabis businesses as a way to spur economic development and create much needed revenue. The City engaged the services of HdL to help develop a Cannabis Management Program that would allow for the sale, distribution, manufacturing, cultivation and delivery of cannabis in order to stem the red ink and stabilize the City’s economy. With HdL’s help, Port Hueneme became the first city in Ventura County to establish a Cannabis Management Program. Partnering with HdL, the City set a goal of developing a cannabis licensing program that would serve as a model for other cities in the region and around the State. Each license application would be carefully vetted to ensure compliance with State and local laws, compatibility with the surrounding community, and success for the local industry. The City strove to make the process as transparent as possible and to maintain open communication with residents, law enforcement and other stakeholders. Port Hueneme’s cannabis program has proven to be a success, bringing in more than $2.3 million in tax revenues during 2018 and 2019. Cannabis businesses have created 210 local jobs with an average salary of $18 per hour and have contributed over $250,000 to more than a dozen community programs.
HdL’s Cannabis Management Team is led by Compliance Director David McPherson, who is one of California’s most recognized experts on cannabis and hemp regulations. Prior to joining HdL, David spent 28 years working in local government for Orange County, Newport Beach, San Jose and the City of Oakland, where he became the first tax administrator in the country to successfully tax, regulate and audit cannabis businesses.
HdL’s team for Port Hueneme also included Deputy Compliance Director Matt Eaton and Senior Compliance Inspector Kami Miller. Matt has 29 years’ experience in law enforcement, including 6 years as an investigator in Colorado’s Marijuana Enforcement Division, where he conducted more than 10,000 regulatory, financial and criminal investigations. Kami served three years as a Marijuana Compliance Manager for the State of Nevada and played a key role in the implementation of Nevada’s medical marijuana program.
HdL helps cities and counties plan and prepare for a successful and wellregulated cannabis industry by developing regulations, tax policies and realistic projections for the size of the industry and the revenues it might provide. HdL also helps cities select the most promising businesses and provides financial audits and inspections to ensure ongoing compliance.
HdL’s cannabis team has more than 46 years’ combined experience developing and implementing cannabis policies. HdL has helped more than 150 cities and counties throughout California to develop cannabis regulatory programs, land use regulations, tax measures, conduct background checks, application processes, staffing plans and cost recovery fees, and to ensure ongoing compliance through financial audits and inspection review.
• Association of Counties Orange County Chapter
• Bond Buyers Annual Conference
• California Association of County Treasurers and Tax Collectors
• California Contract Cities Association
• California Police Chief’s Association
• California Society of Municipal Finance Officers
• Central Valley Cities Attorney Association
• City of California City Stakeholder’s Meeting
• City of Hanford Workshop
• City of Sonoma Workshop
• County Administrative Officers Association
• County of Monterey Fiscal Workshop
• County of Placerville Chamber of Commerce
• County of Santa Barbara Fiscal Workshop
• League of California Cities
• North Coast Regional Summit
• San Bernardino City/County Conference
• Santa Barbara Economic Forum
• State Board of Equalization
Contact HdL Cannabis Compliance Services