Santa Barbara’s wine industry declared war on Weed and Pot is winning

Santa Barbara’s wine industry declared war on Weed and Pot is winning

They might not be profitable yet, but California’s biggest pot farms are here to stay in Santa Barbara County.

When pot farms showed up in Santa Barbara County in 2017, the wine industry went on the attack, vowing to launch a “giant legal battle” against the “horrifying” pot farms that they said would “be the end” of the wine industry in the region.

Six years later, despite such apocalyptic warnings — along with lawsuits, zoning challenges and political pressure — pot farming is booming in Santa Barbara. The coastal county is home to the largest pot farms in the state, with 413 acres dedicated to cannabis cultivation, according to Brittany Odermann, a deputy county executive officer for the county government. That’s even more than Humboldt County, the longtime pot capital of California, which has 332 acres dedicated to the crop, according to a recent county report.

Part of that boom is thanks to the sheer scale of individual farms: Santa Barbara is now home to 13 of the 20 largest pot farms in California, which together are growing cannabis on more acres than every one of the 1,000 pot farms in Humboldt County combined.

Santa Barbara’s farming industry has faced all the same market challenges that have plagued the industry statewide, making it difficult to turn a profit. In fact, the local industry’s boom has helped fuel one of the central issues: The state’s farms grow more pot than consumers are buying, which has led to a crash in wholesale prices. Those headwinds have forced some farms in the county to cut back on plans to expand, and some smaller farms to go under entirely.

In spite of those headwinds, Santa Barbara County’s cannabis crop last year was worth more than its wine grapes, according to the county’s annual crop report. And it wasn’t a small difference: Santa Barbara’s pot farms grew $260 million worth of cannabis in 2022, nearly three times as much as the local wine grape’s $96 million harvest. Despite the wine industry’s calls to wage a war on legal pot farms, weed appears to be winning the latest battles.

At this point, even the industry’s fiercest critics will admit that years of legal wrangling have failed to stop Santa Barbara from becoming California’s premiere pot-growing region — and it’s likely to keep that distinction for the foreseeable future.

‘Guerrilla warfare’

Santa Barbara County has a remarkably short history of growing cannabis. Although California grew a significant portion of the country’s illicit-market pot in the decades before legalization, that production was largely concentrated in Northern California; almost no large-scale operations existed in Santa Barbara even a decade ago.

But that changed at lightning speed after California’s voters legalized pot in 2016, spurred on by excellent weather and favorable local regulations, including at one time being the only county to allow an unlimited amount of total cannabis acreage. By 2020, the coastal county was home to 35% of the state’s pot farm licenses, more than any other county in the state. 

That put some of the biggest pot farms in the country within smelling distance of the region’s famous wineries, avocado orchards and pricey residential neighborhoods. Many locals were unhappy with their new neighbors. Grape and avocado growers complained that the nearby pot farms would block them from spraying pesticides out of fear that the chemicals would drift onto nearby cannabis crops, which must be free from most pesticides, according to state law. 

Others were concerned about odor from cannabis, a famously smelly plant. Winemakers have said the aromas make it unbearable to visit their tasting rooms, and have even fretted it might taint their grapes. Residents in the beachside town of Carpinteria, meanwhile, have complained that the smells wafting from massive pot greenhouses are intolerable. One local told the Guardian that the smell is “like a few dozen skunks letting loose at the same time.”

Laura Capps, a county supervisor, was elected in 2022 on a platform that included criticism of the county’s regulation of pot farms. She told SFGATE that the odor is so strong some county residents have complained it’s caused allergic reactions and other health impacts.

“It’s beyond just not enjoying the smell of something,” Capps said. “It’s really causing some medical issues.”

As the tension escalated, angry locals turned their attention to the politicians whose lax regulations had allowed the industry to scale so quickly, questioning their close relationships with the budding industry. In January 2019, a public comment session at a meeting of the county Board of Supervisors devolved into ugliness; speakers criticized lawmakers with such venom that one county administrator described it to Los Angeles Magazine as “guerrilla warfare,” and sheriffs removed a Santa Ynez vintner for almost fighting a pot farmer in the middle of the proceedings.  

Some of that criticism has since been vindicated. A 2019 Los Angeles Times investigation found that two of the county supervisors who had argued against limiting the scale of farms had accepted thousands of dollars in campaign contributions from pot farmers, and a 2020 grand jury report found that local politicians had “failed the people of Santa Barbara County,” according to the Santa Barbara Independent. 

Once it became clear that local lawmakers wouldn’t help them tamp down the burgeoning pot industry, frustrated locals, led by the wine industry, opened a new front in the war on weed: the court system.

‘A giant legal battle’

The legal fight against pot farms has been largely taken on by the Santa Barbara Coalition for Responsible Cannabis, which is led by local winemaker Blair Pence. The group has filed at least four lawsuits against the county and two dozen appeals of cannabis zoning permits since 2019. Most recently, it filed an appeal with the state Water Resources Control Board alleging that 22 major pot farms were illegally pulling water from the Santa Ynez River.

Teddy Cabugos is the president of Sunstone Winery, near the Santa Ynez River, one of the very few Santa Barbara wineries investing in the cannabis industry. He told SFGATE he felt like his business was under attack when he applied to grow cannabis on his property.

“As we were going through the permitting process we had a massive bull’s-eye on our back,” Cabugos said. “There was already a huge war going on with the wine community versus cannabis.”

Although the coalition has been able to negotiate a settlement with greenhouse growers in Carpinteria to install better odor-reducing technology, almost all of their other efforts have failed, including the complaints over water rights.

Pence, who vowed in 2019 to launch “a giant legal battle” when a pot farm moved in next to his vineyards, did not respond to repeated interview requests from SFGATE. Lionel Neff, a board member for the coalition, said in an emailed statement that the group plans to appeal the water board’s decision. He said the coalition has been forced to seek legal recourse against cannabis farms because the government has not been appropriately regulating the new industry.

“Because they failed to create common-sense regulations in the first place, we are forced to use the remedies at our disposal,” the emailed statement said.

‘Commodity capital’

Winemakers may have failed to make a dent in the pot boom, but market pressures still shape — and, to some extent, constrain — the cannabis industry’s growth in Santa Barbara County. Robert Haugen, who had been growing both pot and wine grapes on his Santa Barbara land since 2018, recently decided to stop growing cannabis because he said his farm is too small to make any money.

“Last year I grew 50%, this year I’m not growing at all. It just doesn’t make any sense. I have 10 acres of cannabis. There’s a … 150-acre cannabis farm a few miles away from me,” Haugen said.

Haugen said that even though small farms like his are going out of business, he still thinks the county’s mega-farms will be the state’s “commodity capital” of cannabis cultivation for the foreseeable future. Still, those huge successes have helped create one of the problems driving producers like Haugen out of the market: California is growing more legal pot than it can sell. That oversupply has caused the price to plunge by as much as 95% since the early days of legalization, leaving farmers across the state struggling to run a profitable business. 

Even the biggest growers in Santa Barbara are feeling the strain, causing many large farms to reduce their overall size in response. In April 2023, local growers gave up rights they’d previously obtained to grow cannabis on a combined 163 acres of land without planting anything, according to the Santa Barbara Independent. 

Still, there are plenty of farmers here willing to take the leap; according to county staff, until July this year, there was a wait list of farmers seeking permits to grow pot on their land. Peter Rupert, an economics professor at the University of California, Santa Barbara, said that he expects the county’s pot farms will become an even bigger force in the local economy once the federal government allows farmers better access to banking services, and to export their pot across state lines.

“To me, it’s sort of sitting and waiting for the [federal government] to say they can bank and there’s interstate commerce. And then I think it’s going to grow and be a super viable industry,” Rupert said.

After years of battling the industry, it seems that most critics have become resigned to the fact that fields of weed are here to stay. That includes Capps, the county supervisor who has been critical of pot farms for years.

“You might talk to some more extreme people [in Santa Barbara] who want it to just go away, but I don’t ascribe to that notion. That’s not where we are in 2023,” Capps told SFGATE. “Cannabis isn’t going away. I’m realistic to know that it’s here and it’s legal.”

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