Santa Barbara County reported $ 3.1 million in cannabis tax revenue for the first quarter of fiscal year, 25% less than the same quarter last year.
The county saw several quarters of rising tax revenue through mid-2021, when it saw a 45% year-over-year decline.
“As part of the fourth quarter update, employees began to signal that supply glut was emerging both nationally and locally, causing price compression on wholesale cannabis products,” said Steven Yee, a financial analyst with the county executive office, on Tuesday before the board of the supervisory board meeting.
“Given the information currently available, the analysis of the employees shows that the oversupply of wholesale products still persists.”
The $ 3.1 million raised in the first quarter of fiscal 2021-22, which ran from July 1 to September 30, also represents a 17% decrease from the previous three-month period, Yee said.
Yee said the number of licensed retail locations across the country remains an issue when comparing the amount of cannabis products being reduced in addition to consumer demand.
The fact that cannabis products cannot cross state lines due to trade laws further limits the ability of breeders in California to bring their product to market, he added.
Of 69 operators in the county who were expected to report gross revenue for the last quarter, 47 reported no revenue, 16 reported no revenue, and six reported no revenue, Yee said. Most of the district’s operators are farmers.
Applications are pending for more acreage than allowed by the district’s cultivation restrictions of 1,575 hectares for inland areas and 186 hectares for the Carpinteria area.
By the end of September, applicants had submitted land use claim applications for a total proposed area of 3,173 hectares inland and 214 hectares in the Carpinteria area.
However, the proposed area may fluctuate due to changes in project design while applicants are in the approval process, Yee noted.
According to the staff’s report, about 1.6 hectares of inland acreage are not yet committed, and about 100 hectares of Carpinteria’s arable land are not yet committed.
Growing projects will not be added to the cap until operators have an approved land use permit, apply to be on the eligibility list with the County Executive Office, submit a full approved cannabis business license application, and pay any required cannabis business license fees / deposits.
Yee said that once a land use permit has been approved, operators can apply for a business permit, but “not necessarily” a land use permit for operators to apply for a business permit.
In the coming quarters, the county staff will figure out how to set the cap on acreage and allow some operators to recreate fallow land if necessary, said Brittany Heaton, who works on the county’s cannabis program. County staff will also focus on phasing out legal, non-compliant operators who have grown without county permits or business licenses.
There were 22 projects on appeal for the first quarter, Yee said.
To date, the planning and development department has received a total of 159 business license applications, 33 of which have an approved land use permit, potentially making them eligible for a final business license, Yee said.
“This means that for all other pending business license applications, cannabis operators really need to focus their efforts on obtaining a definitive land use claim,” he added.
According to the personnel report, the district has so far approved 27 commercial licenses.
Tuesday’s quarterly update of cannabis compliance, enforcement and taxation will be the final presentation to the board. Starting next quarter, the report will be included in an appendix to the County Executive Office’s quarterly budget updates.
The Santa Barbara County Sheriff’s Office completed eight enforcement actions in the first quarter, seized 3,253 live plants valued at an estimated $ 1.6 million and confiscated 1,205 pounds of dried cannabis product valued at an estimated $ 1.8 million, said Heaton.
The sheriff’s team also made nine arrests related to illegal indoor and outdoor cultivation and the operation of illegal delivery services, the staff said.
“In all of these operations, the team continues with an adaptive enforcement style that focuses not only on illicit cultivation, but also on the unsafe movement of unchecked cannabis products that pose a significant risk to consumer safety and severely undermine the legal foundation. Market ”, it says in the staff report.
The Agriculture Commissioner’s office recently completed an investigation in mid-county and an ongoing investigation in south county into worker health and safety and the use of pesticides in connection with cannabis operations, the report said.
The Planning and Development Department initiated four cannabis enforcement cases, one in South County and three in North County, and closed eight cases, four in South County and four in North County.
The department also responded to 345 cannabis complaints, including 300 odor complaints in the Carpinteria Valley.