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Santa Barbara County cannabis tax revenue up 60% in fourth quarter of 2018-19

Santa Barbara County cannabis tax revenue up 60% in fourth quarter of 2018-19

Santa Barbara County’s cannabis tax revenue for the fourth-quarter of last fiscal year rose to $2.3 million, a 60% increase from the two previous quarters, according to a report submitted Tuesday to the Board of Supervisors.

The fourth-quarter taxes paid by 36 operators brought the total for the 2018-19 fiscal year ending June 30 to $6.9 million, or $1.2 million more than anticipated, according to the report from Steven Yee, fiscal and policy analyst for the County Executive Office.

An audit system is not yet in place, however, to assure cannabis operators are accurately reporting income and paying appropriate taxes, and 2nd District Supervisor Gregg Hart wanted to know why it’s taking so long to implement one.

“We are actually the first entity in the state of California looking for a tax compliance system,” responded Dennis Bozanich, deputy county executive officer. “We’re looking for a vendor. There was nothing we could pull off the shelf and plug-and-play.

“It’s a real challenge getting the right vendor that can work with the state’s track-and-trace program,” he added.

The county’s primary use for cannabis tax revenue is enforcement, and during the same three-month period, the multi-departmental County Sheriff's Cannabis Enforcement Team conducted 12 raids on illegal cannabis operations.

Yee’s report said the raids resulted in the eradication of 471,000 plants with an estimated street value of $118 million and the seizure of 50,000 pounds of processed product worth an estimated $50 million.

During the fourth quarter, the Planning and Development Department staff responded to 99 odor-related complaints, and of the 31 enforcement cases that were opened, 17 were the result of odor complaints.

Tracy Farhad, representing Santa Barbara County Coalition for Responsible Cannabis, asked the board why it’s taking so long for the staff and Planning Commission to develop solutions to the odor problem.

Board Chairman and 5th District Supervisor Steve Lavagnino explained that the commission has a “major backlog” of issues to handle, including cannabis regulation, and he wished the commission would schedule more meetings or change procedures to work through them faster.

Farhad also asked that future cannabis reports be placed on the departmental agenda for discussion and public comment, rather than on the administrative agenda of items usually approved in a single vote without discussion, and Lavagnino promised that would be done.

In addition to odor, most of the cannabis complaints involved unpermitted structures and unpermitted cultivation, the report said.

As of July 31, a total of 154 county cannabis operators had submitted permit applications to the Planning and Development Department, with 11 land use permits and two coastal development permits issued.

Six of the land use permits and both coastal development permits were appealed prior to being issued, the report said.

One of the coastal development permit appeals was denied by the Planning Commission and was subsequently heard in a Board of Supervisors meeting, where it was also denied.

Twenty-seven applications for conditional use permits had been received by the end of the quarter, but none of those have been issued, the report said.

The county has also received 11 applications for cannabis business licenses, and three have been issued — two for outdoor cultivation in Los Alamos and one for a nursery in the Goleta area, the report said.

Only one county cannabis operator obtained a local land use entitlement, a local cannabis business license and a state annual license during the fourth quarter.

Photos: Together We Thrive links wine, cannabis, tourism

Photos: Lompoc welcomes 5th cannabis dispensary to town

Complete Series - Green Rush in the 805?: Cannabis on the Central Coast - Looking at land use, money, science, law enforcement and education

"Green Rush in the 805?" explores five areas that will be affected by the legalization of cannabis: land use, money, science, law enforcement and education. Our aim is to equip readers with the knowledge needed to contextualize decisions made by governing bodies, and grasp the challenges that will be faced by growers, law enforcement officials and schools.

For the past 15 years a local agriculture company has been spraying my avocados for persea mites and avocado thrips with Entrust, a certified organic product. Persea mites cause defoliation and low yields. Avocado thrips cause scars that cut wholesale price by half. But this year they won’t spray Entrust or any conventional pesticides for that matter because of fear of lawsuits from cannabis growers. They are one of only three licensed, insured appliers that serve Carpinteria. The second also will no longer spray in Carpinteria for the same reason.

A new recreational cannabis dispensary opened its doors in Lompoc on Friday, becoming the second such business in both the city and all of Santa Barbara County. The Ocean Hye Club, at 1017 E. Ocean Ave., celebrated its first day of operation on Friday morning with plans on hosting a much larger grand opening event on Saturday. Although the shop was not yet fully decorated or stocked, several customers were on hand to check out the new business in its first hour of operation.

The Lompoc Valley Cannabis Association is set to host its first “CannaBrew,” a cannabis industry social mixer. The event aims to provide a networking platform for established and up-and-coming cannabis companies, industry professionals, ancillary service providers and supporters from Lompoc and Santa Barbara County with influence across the Central Coast. It is scheduled for 6 to 9 p.m. Wednesday, June 26, at Lompoc’s Hangar 7, 107 W. Ocean Ave.

Cannabis issues will take up most of the Santa Barbara County Board of Supervisors meeting Tuesday in Santa Maria, where changes to the land use ordinance and the licensing ordinance will be considered. Supervisors are scheduled to meet at 9 a.m. in the Board Hearing Room of the Joseph Centeno Betteravia Government Administration Building at 511 E. Lakeside Parkway.

Deliberations on potential amendments to cannabis business licensing ordinances, which were cut short last week by a loss of electrical power, are scheduled for the Santa Barbara County Board of Supervisors meeting Tuesday. Supervisors also plan to hear a report on Community Choice Energy and consider special tax levies for two facilities districts — one for the Orcutt Community Plan and the other for Providence Landing — when they meet at 9 a.m. in Santa Barbara.


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County Reporter/Associate Editor

Lee Central Coast Newspapers associate editor Mike Hodgson covers Santa Barbara County government and events and issues in Santa Ynez Valley. Follow him on Twitter @MHodgsonSYVNews.

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