As the county supervisors prepare to vote next week whether to propose a cannabis tax increase for the November ballot, they are facing a dilemma largely of their own making — the unintended consequences of promoting a "Green Rush" in Santa Barbara County. A glut on the market in California, fueled in part by over-production in the North County and Carpinteria Valley, has caused prices for cannabis to plunge by roughly half since 2021. Cannabis tax revenues have declined, too, even as the county has approved zoning permits for 1,760 acres of legal cultivation, more than anywhere else in the state. A thriving illegal market also has depressed the price of cannabis.
On Tuesday, the supervisors will wrestle with how and whether to initiate a cannabis tax measure that can at least ensure that the county continues to break even. It costs nearly $5 million yearly to administer the cannabis program and go after illegal operators. For more than two years, the board has pondered how best to bring in more revenue without putting growers out of business. Many have already quit.
The supervisors also want to address the glaring tax disparity between indoor and outdoor growers. During the 2022-23 fiscal year, county records show, the indoor, or greenhouse operators of the Carpinteria Valley paid $4.5 million in cannabis cultivation taxes, or 82 percent of the $5.5 million collected by the county; while the outdoor growers of the North County paid only $993,000, or 18 percent.
At a May 14 board hearing on cannabis taxes, Supervisor Joan Hartmann, who represents the Santa Ynez Valley and the wine country west of Buellton, where cannabis has taken root, questioned whether the county was recovering its costs for outdoor cannabis. The county's cannabis ordinance allows up to 1,575 acres of the outdoor crop under hoops and in open fields, most of it in the North County.
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