SB Grand Jury Blasts Board of Supervisors for Marijuana Mess

By Nick Schou   |   July 9, 2020

On June 30, Santa Barbara’s Grand Jury released an historic, scathing report detailing alleged official malfeasance by the Board of Supervisors as it sought to regulate cannabis over the past three years, particularly in Carpinteria but also in North County wine country. By law, the report mentioned no names and took no stand on the legalization of cannabis, which has the support of a majority of county residents. Yet much of the report highlighted what it called questionable behavior by members of the Board’s so-called “Ad Hoc Sub Committee” which only consisted of Supervisors Steve Lavagnino and Das Williams.

In its report, the Grand Jury wrote that as a result of the Ad Hoc committee’s direct handling of cannabis issues on behalf of the county, the cannabis lobby had “nearly unfettered access” to the Board of Supervisors and county staff, resulting in the “excessive allowance of licenses and acreage, creation of an unverified affidavit system,” and other policy errors. According to jurors, the county also failed to follow up on “widespread odor complaints” and other community concerns.

“The action taken by the Santa Barbara Board of Supervisors to certify the development of a robust cannabis industry as the primary objective of the cannabis ordinances has altered the quality of life in Santa Barbara County, perhaps forever,” the report’s introduction flatly states. “Instead of a balanced approach carefully evaluating how the cannabis industry would be compatible, both as to amount of acreage and location, the Board simply opened the floodgates.”

One of the Grand Jury’s most serious charges against the “Ad Hoc” committee was that it pushed through a tax revenue scheme that allowed growers to be taxed only for the “gross receipts” they produced rather than the actual square-footage area of their farms. Thus, the jurors argued, the county effectively delegated its cannabis tax policy to a bunch of marijuana farmers who might simply sell to end users on the black market whatever portion of their crop they didn’t want to pay taxes for.

Although the committee at one point promised tax revenues as lofty as $25 million per year, Santa Barbara only generated $6.8 million worth of tax revenue from 2018 to 2019. By comparison, Monterey County, which has fewer farms but taxes them by square footage, took in in $15.4 million over the same period.

In any event, jurors argued, the huge revenues being promised by the committee as well as cannabis lobbyists were simply imaginary, assuming all that weed was supposed to be legal. “Santa Barbara is just one of 58 counties in California,” they pointed out, “but with almost 500 registrants seeking as many as 1,365 separate cultivation permits, the county’s growers could potentially produce over 3.7 million pounds of cannabis per year, which is more than double the legal amount of cannabis consumed by the entire state.”

Under the aegis of the Ad Hoc committee, Lavagnino and Williams also allegedly allowed cannabis growers who own numerous greenhouses on county property immediately surrounding Carpinteria to receive county permits simply by signing affidavits claiming they intended to eventually conform to whatever land-use or other regulations county officials might have in mind. This so-called “legal non-conforming status” category, jurors wrote, allowed individual growers to receive as many 100-square-feet growing permits as they wanted. Each of those permits was supposed to be provided only to lots that included a “residential structure.” The county, however, never enforced that rule, allowing growers to vastly expand their operations and certain Carpinteria farmers to tally up dozens of such permits for their rapidly expanding farms.

Perhaps the Grand Jury’s most incendiary charge is that it felt stonewalled by the very county executives who were the target of its inquiry, which took some 18 months to complete and included interviews with hundreds of people. “This investigation by the Jury was hindered by the denial of its request for subpoenas to be issued to non-government witnesses who might have been helpful to the inquiry,” jurors wrote. The investigation was further hindered by a “two-month delay in the final production of requested documents from the County of Santa Barbara that was purported to be responsive and complete.” And it gets worse: “During the investigation, the Jury learned that all documents requested have not been provided.”

Das Williams Responds: “Everyone Gets Unfettered Access”

Since the Grand Jury’s report became public last week, numerous local news stories and editorials have appeared about Santa Barbara’s cannabis controversy, including a July 5 Los Angeles Times article by investigative reporter Joe Mozingo, whose previous reporting on Santa Barbara’s cannabis policy first uncovered many of the allegations of corruption and undue influence that were extensively catalogued in the new report. In that article, Williams claimed the paper was only presenting “one side” of the story, while Lavagnino accused the Grand Jury of being an out-of-touch bunch of squares. “The demographics of the Grand Jury are not reflective of the county as a whole,” he elaborated. “It is not at all surprising to me that a group of predominantly white senior citizens is uncomfortable accepting that cannabis is now mainstream.”

This week, in an interview with the Montecito Journal, Williams claimed it was “ethically questionable” for any reporter to write about a Grand Jury report before an official response could be issued [it’s not], but nonetheless agreed to speak on the record. “I guess I can tell you that Grand Juries are typically critical of processes,” Williams began. “That’s okay. I take seriously the responsibility to improve any situation the Grand Jury talks about, whether it’s homelessness or this matter.”

Williams claimed he felt the Grand Jury had unfairly targeted him. “The questions they asked were so narrow in focus it was clear to me they already knew what their story was before they asked me,” he said. “They demonstrated a lack of knowledge about land use and the county’s limited options before permitting was put in place.”

In his defense, Williams argued that his efforts to regulate the cannabis industry were genuine, if imperfect, and that he only took office after Proposition 64 had essentially mandated the expansion of cannabis grows in California. “Mistakes were made, but we made a rational response to something that was already in existence,” he said, although he denied any notion that he was in the pocket of the cannabis lobby. “The weirdest thing is, I have always had a policy of accepting a meeting from anybody who wants to meet. I view that as my job, so from the movers and shakers of this community to the dual-diagnosed people who send me handwritten, three-page letters about conspiracies, I meet with all these people. Everyone gets unfettered access to government in my view. That’s how it should work.”

In a trio of text messages, Williams subsequently denied all three of the Grand Jury’s main allegations against him. “We’ve caught a sizable proportion of marijuana growers who tried to game the system and held them accountable,” he said, adding that 72 raids and 23 prosecutions show evidence of the program’s success. “It’s possible we would have caught more by adjudicating every single one, but it’s also possible we would have caught far less because we’d still be in the process of holding hearings on them.”

Williams also argued that taxing cannabis growers by gross receipts rather than by actual size was the product of popular demand rather than any undue influence of the cannabis lobby. He has a point, because whatever its origins, when Supervisors officially weighed in on the proposed ordinance on February 13, 2018, Supervisors Janet Wolf and Joan Hartmann also voted in favor of it. Steve Mann, a conservative rancher, was the only no vote. Then on June 5 of that year, 75 percent of county voters marked “yes” when asked to vote on whether to approve the gross receipts-based tax.

 “The voters approved this method of taxation and we can’t change it without going back to the voters,” Williams contended, adding that the county has hired an auditor “to make sure people are paying their correct amount of taxes.” He also pled ignorance of any missing documents or pattern of stonewalling, as alleged by jurors. “I was not aware of the County material,” he said in reference to the files, “but the Grand Jury cancelled three or four [of the] times we had allocated for their interview between the end of February and the end of April.”

Santa Barbara’s Board of Supervisors has 90 days to officially respond to the Grand Jury’s findings. Until then, Barney Melekian, an assistant county executive officer, refused to comment on the report beyond the county’s initial media response. “The Board of Supervisors had previously amended the cannabis land-use ordinance to restrict cultivation in response to community concerns, and as recently as two weeks ago, directed staff to bring back more changes to further restrict cultivation,” it states. “Staff will return with those ordinance changes on July 14.”

A Former Supervisor Remembers: “I Felt Like Alice in Wonderland”

Besides Williams, the Montecito Journal spoke with several other sources who were interviewed by the Grand Jury, including public officials who have clashed with both him and Lavagnino over cannabis. One of them is former Supervisor Wolf, who claims to have directly witnessed much of the alleged behavior mentioned in the jury’s report and who frequently voted against the pair on cannabis policy. “I thought that this report was one of the most comprehensive reports I have ever seen,” Wolf said. “The depth and information they had and asked for, and unfortunately there was some they apparently didn’t get, was pretty incredible. I thought they did a fabulous job.”

Wolf provided the lone vote in opposition to the creation of the Ad Hoc committee on cannabis, which she viewed as a conflict of interest, and she wasn’t surprised that with the Grand Jury’s finding that emails and text messages suggested that the county was effectively outsourcing its policy to industry lobbyists. “We had never done such an enormous land use ordinance in the way that was being proposed,” she said. “To have it being done with two board members and without the Brown Act (which protects the public’s right to know how polices are deliberated behind closed doors) on the face of it was wrong.”

As Lavagnino and Williams began to articulate their vision for county cannabis policy to other board members, Wolf recalls, things got even weirder. “I couldn’t figure out why we were moving in the direction we were moving in when we had the schools and community members coming to us,” she said. “We were just moving forward.”

Wolf said she regrets voting in favor of the committee’s tax revenue proposal but is proud of the fact she publicly opposed the grower affidavit scheme. “That was the most ridiculous thing I ever saw,” she said, “the implications of which, of course, we are all seeing now.”

Carpinteria Reacts: “It’s Disappointing and Frustrating”

As Principal Planner with Carpinteria’s Planning Department, Nick Bobroff is no stranger to Santa Barbara’s burgeoning cannabis controversy. Earlier this year, he prepared a report urging the County Planning Commission to require all cannabis farms to obtain Conditional Use Permits that would take into consideration any negative community impacts. Despite the Planning Commission’s unanimous vote in favor of Bobroff’s letter, Lavagnino and Williams led the board in refusing to apply his recommendations to Carpinteria, where most of the farms are located.

“The Board ultimately decided to go in an entirely different direction, just focusing on inland parts of the county and disregarding what’s happening in Carpinteria and other coastal areas,” Bobroff complained. “It’s disappointing and frustrating.” He sees no evidence that the Board of Supervisors will change course on enabling cannabis operations anytime soon. “County staff appears to be planning to move full speed ahead,” he said.

A Question of Timing: A Deliberate Stonewalling?

If anyone has reason to feel vindicated by the Grand Jury’s report on cannabis, it’s Laura Capps, who ran unsuccessfully against Williams for First District Supervisor on March 3. Capps got the Journal‘s endorsement, but not the Santa Barbara Independent‘s. In a semi-apologetic editorial that read more like an endorsement for his opponent, the paper asserted that endorsing Williams was among the most “difficult decisions” it has “struggled to make” in its 34-year history. “Is his behavior over the past three years a good enough reason to toss him overboard? We don’t think so.”

In a late-January debate with Williams hosted by the Journal, Capps highlighted what she called her opponent’s cozy relationship with cannabis lobbyists and his refusal to respond to complaints from communities such as Carpinteria. “I’m doing this because I believe so strongly that we need a change in leadership,” she argued onstage. “I couldn’t stand watching what’s happening.”

Several sources who spoke to the Journal pointed to the Grand Jury’s explosive claim that its investigation was stymied by stall tactics from county executives. To them, any stonewalling could have only helped Williams win his race against Capps. “The election was in March, and I must have gotten my summons a year and a half ago,” complained one Carpinteria resident who asked not to be identified by name but who Grand Jurors interviewed for the cannabis probe. “I thought they’d be putting out their report by the beginning of the year. This was a deliberate stonewalling.”

For her part, Capps says she hopes the Grand Jury’s report will help speed reform of the county’s cannabis policy. “The non-partisan, independent Grand Jury deserves our thanks for their thorough investigation,” she said. “Among many discoveries, it’s alarming to learn that County leaders stalled this work for months prior to the election. Now, I hope they do the right thing and follow the Jury’s common-sense recommendations – especially protecting the health of children and neighbors and long overdue County ethics reform. It is time.”

Next week: Are county supervisors involved in the cannabis controversy being probed in a separate investigation?


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