Cannabis Revenue: Why Did We Do This?

By Jeff Giordano   |   December 28, 2021

So, the numbers are in for the most recent Quarterly Cannabis Tax Revenue and — like before — they are completely underwhelming and leave us with more questions than answers. Allow me to explain.

First a bit of history: Santa Barbara County is the only county that relies solely on self-reported grower revenue to calculate the taxes owed. Other counties tax cannabis on an easily verifiable square-foot-grown calculation. This latter method does not make the county de-facto pot partners, nor does it require auditing or enforcement which — of course — our county has not budgeted for. 

Even more perplexing (and this was highlighted by our County Grand Jury) is the fact that our elected Tax Collector was excluded from any Board of Supervisors discussions about their unique, grower-friendly scheme. Curious, wouldn’t you say?

Now remember we have allowed nearly three square miles of open grow cannabis in North County and parts of South County. Indeed, the coveted Santa Rita Hills AVA with 59 wineries and more than 2,700 grape acres will be surrounded. So much for tasting rooms (no, skunk and wine just don’t pair) or a leisurely drive along the 246 for an outdoor lunch. As the Grand Jury stated: “wine perception is 80% olfactory” — obviously. 

Anyway, back to the most recent data and the alleged reason (other than blatant special influence peddling) why we have the largest open grow cannabis farms in the world, i.e. the almighty buck. 

So, guess how much our $1.2 billion county “made” (revenue not profit!) this quarter from cannabis? A whopping $3.1 million, down 26% from the paltry $4.2 million we made during Q1 of last year. And, just like last year, a full 30% of the growers reported zero revenue (huh?) or simply didn’t bother to report — you and I should try this trick when next asked to pay our property taxes. Our county is being made the fool while individual growers are acquired for $567 million, and others are making millions each month in cash.

So, what are our supervisors doing about it? Well, in the Third District they are playing armchair economist talking about the price of cannabis, illegal grows, high taxes, blah, blah, blah. So now, the folks who got us into this mess are apologists and shills for the cannabis industry — talk about conflicted. 

This is complete insanity. Show a modicum of introspection, take an integrity pill, and change the tax scheme itself. We are not in, nor should we be in, the cannabis business! Monterey County has just 62 permitted acres of cannabis — a fraction of Santa Barbara County — yet makes more each year (guaranteed!) from their easily verifiable square-foot-grown method of taxation as we do. 

We have sold ourselves cheap and compromised our health (research Ground Level Ozone), our quality of life, and our wine and hospitality industries. Perhaps at some point we can have an honest discussion about large-scale commercial cannabis and possible solutions. Then again, this is Santa Barbara County, so let’s not hold our breath (pun intended).


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