The cannabis industry seems to be shrinking in Santa Barbara County as revenue from the industry is in decline, and county officials seem ready to rethink what that means for the future.
The Santa Barbara County Board of Supervisors voted to adjust its upcoming 2025-26 fiscal budget on Tuesday to account for less tax revenue from the cannabis industry and made changes to how many acres can be used to grow.
“The bottom line is that cannabis tax revenue is in decline and has been since fiscal year 22-23,” Deputy County Executive Officer Brittany Odermann said.
According to Odermann, the county received only $5.53 million in tax revenue for the current year. The county had expected to receive at least $6.72 million, which is the cost to fund multiple programs created in response to the industry.
The items funded by the county’s tax revenue include cannabis education, enforcement costs for the Santa Barbara County Sheriff’s Office and the District Attorney’s Office, and deferred maintenance projects.
The costliest item for the funding is enforcement, which costs $3.3 million per year. The cost of a single deputy is $242,000 annually.
Odermann explained that the nature of enforcement has changed since the county first allowed cannabis farms, retail stores and other related businesses. While early enforcement focused on illegal grows, over time, illegal activities shifted to transferring legal cannabis out of the county’s jurisdiction or across state lines, she said.
First District Supervisor Roy Lee stated that sheriff’s deputies could be more successful going after fentanyl, homelessness, or helping businesses or schools.
Supervisor Steve Lavagnino agreed with Lee and said deputies could be used for other issues in the county.
“We got a lot of other things going on besides cannabis and to tie … a sheriff’s sergeant and three deputies to just these illegal activities, just in cannabis, to me, doesn’t seem productive,” Lavagnino said.
Lavagnino also expressed frustration about the county not doing enough to find people with arrest warrants and stated that the funds could for those efforts.
In response to the board’s comments, Undersheriff Craig Bonner stressed that the Sheriff’s Office did need funding to go after crimes involving cannabis.
“There is a workload out there. There are people selling cannabis to juveniles. It’s in our schools. It’s impacting our children, and we do need to have resources there to address it,” Bonner said.
During public comment, speakers supported the cannabis industry and the revenue it generates. Some also encouraged the board to spend less money on law enforcement and invest it in the community.
Ivan Vega, the associate organizing director for Future Leaders of America, asked that the revenue be used to establish a youth fund instead of funding the Sheriff’s Office.
He pointed to counties such as San Diego County or Sacramento County as examples of how cannabis revenue could be better used.
“Let’s honor the spirit of Prop. 64 and invest in preventing, healing and youth empowerment, because young people deserve more than just enforcement,” Vega said.
The Board of Supervisors decided to change the budget to reflect the loss in cannabis revenue, but decided to have a deeper discussion about the cost of enforcement at a future meeting.
Also on Tuesday, supervisors reduced the cannabis cultivation acreage caps.
The board voted to lower the number from 186 to 140 acres in the Carpinteria overlay area and from 1,575 to 1,399 acres in other unincorporated areas.
The Board of Supervisors also voted to require background checks for anyone with a 20% or more financial stake in a cannabis operation. The new requirement brings the county in compliance with the California Department of Cannabis Control.
Fourth District Supervisor Bob Nelson supported the item and said he would support lowering the limit if there are signs of criminal activity in the future.
The board also increased the annual business license fee for cannabis operations.
