It was supposed to be a tax windfall for Santa Barbara County. But the Santa Barbara County Grand Jury says the collapse of the cannabis industry in California turned managing the industry locally into a financial burden for the county.
Cannabis legalization in California was billed as a significant new tax revenue source for Santa Barbara County. At first, revenue topped $5.7 million annually, but it's projected to be $1.3 million this year.
An oversupply in the market, illegal suppliers, plus the high costs of permits, fees, and startup costs, combined to hurt the industry. And, the wholesale cost of cannabis dropped from $1,200 a pound in 2020 to around $250 now.
The problem is that the county’s cost of overseeing compliance is now projected to cost the county more than it receives in revenue.
In a new report released Friday, the Santa Barbara County Grand Jury recommended that the county cut compliance costs so it would not lose money on the program.
Santa Barbara County Supervisors actually beat the Grand Jury to the punch, making several cost-saving changes to the program before the report was released.
