The first reading of amendments to the Chapter 50 ordinance governing the cannabis business license process in Santa Barbara County was approved Nov. 2 after the Board of Supervisors made some changes to the language.
But other changes they wanted, with the goal of increasing tax revenue, had to be put off until a future discussion because they would have reached beyond County Code Chapter 50 into Chapter 35 as well as the Uniform Code.
Supervisors unanimously approved the fifth round of amendments aimed at dealing with inefficiencies and inconsistencies that have cropped up since Chapter 50 was originally adopted in 2018.
The amendments will have to come back for a second reading and approval before becoming effective.
One proposed amendment was to give legal nonconforming cultivation operations that have not obtained a land use permit 120 days to do so or cease growing, but supervisors wanted to allow them more time because some have been delayed by circumstances beyond their control or because they have complex projects.
The board ended up changing the deadline to June 30, 2022.
Another amendment established a waiting list for operators who have obtained a cultivation land use permit but didn’t secure a business license before applications hit the county’s inland acreage cap of 1,575 acres.
In addition, an amendment will require cultivators to notify all property owners within 1,000 feet of when they plan to start harvesting, although 3rd District Supervisor Joan Hartmann said that would not be an adequate distance.
But two of the biggest points of discussion revolved around the inconsistency between the state’s and the county’s definition of cultivated acreage and the dearth of cannabis processing facilities in the county.
Brittany Heaton, principal cannabis analyst for the county, said the state only includes the cannabis canopy in its calculations, eliminating even walkways between the rows, but the county includes everything associated with the plants, including drying and processing.
At one time, outdoor processing was allowed, but the county changed that to require only indoor processing with best available odor control technology in an attempt to address public complaints about odor.
Heaton said those factors resulted in very few processing facilities in the county, as growers have sought to maximize cultivation area and avoid the hassle of getting building permits, and led them to send their crops to other counties, thus depriving Santa Barbara County of millions in tax revenues.
Heaton noted unprocessed cannabis was selling for $35 to $50 per pound, while pure flowers sold for $200 to $300 a pound, and the county tax is based on gross value.
Fifth District Supervisor Steve Lavagnino said that represents a 30% to 50% reduction in tax revenue for the county.
“”If we don’t fix processing, the rest of our cannabis program might as well be abandoned,” Lavagnino said, adding it isn’t helping growers to send crops out of the area, and it’s increasing truck traffic and pollution.
“We are just losing an incredible amount of money,” he said. “We can’t just continue this program forward receiving pennies on the dollar.”
First District Supervisor Das Williams agreed and said changing it is urgent.
“It doesn’t make sense to add all these trucking trips for no discernible reason,” he said.
But 2nd District Supervisor Gregg Hart said first the county must determine exactly why there are so few processing facilities in the county. Only then can steps be taken to correct the problem.
“We can’t just do this on the fly like this,” Hart said.
Lisa Plowman, director of the Planning and Development Department, warned that if the board changed the acreage definition and pulled processing out of the calculation, the same changes should be made to Chapter 35 and the Uniform Code to make them consistent.