Cannabis Taxes Generate $1.8 Million

With its first quarterly deadline now in the rearview mirror, Santa Barbara County pocketed $1.8 million in cannabis taxes by October 31. That equates to $7.2 million annually, which is roughly on par with early estimates of what the new industry would generate. Given that much of the county’s first legal cannabis crop has only recently been harvested, much of what’s been produced has not yet been sold. When those sales are taxed, Santa Barbara County’s de facto cannabis czar Dennis Bozanich expressed muted optimism that subsequent quarterly payments will prove more bountiful. To date, county law officers have conducted 10 enforcement actions, yanking up or weed-whacking $88 million worth of crop.

Bozanich noted that the actual number and acreage of permitted cannabis operations is less than initially projected. Many operators who had obtained temporary permits earlier in the year ultimately backed out, he suggested, when new state regulations went into effect this July. As of October, Santa Barbara County had 832 active licenses involving 196 acres. As of July, the same numbers were 1,286 licenses and 315 acres. Of the 96 actual operators, Bozanich told county supervisors, only 30 filed tax returns and made payments. The others either reported no taxable income or filed no reports at all.

Bozanich expressed frustration that to date no one has applied to open a cannabis testing lab in unincorporated Santa Barbara County. Supervisor Das Williams expressed interest in changing the county’s recently approved cannabis ordinance to make it easier for testing labs to secure approval. Supervisor Steve Lavagnino expressed reservation about changing an ordinance when the ink was still wet. “I’ll find some other hill on which to die,” Lavagnino stated.