SLO County’s cannabis program more than $1 million in the red

September 24, 2023


San Luis Obispo County tax payers will pay more than $1 million during the current fiscal year to fund the county’s failing cannabis industry, according to the Sept. 27 Board of Supervisors agenda.

During the 2022-2023 fiscal year, the county spent $400,942 to subsidize the local cannabis industry. The county collected $1,126,229 on cannabis fees and taxes while spending $1,527,171 to manage the program.

Supervisor Dawn Ortiz-Legg in June suggested a cannabis tax freeze in order to allow the industry to prosper. She also wanted to expand the delivery hours from 8 p.m. to 10 p.m. and to permit retail stores in order to generate more fee and tax revenue.

Supervisor Debbie Arnold argued that county residents should not subsidize the cannabis industry.

On June 20, the board voted to lower the cannabis tax rate to 6% rather than raising it to a voter approved 10%, with Arnold dissenting.

As the result of lowering the tax rate, staff now estimates the county will need to spend $1,008,727 to subsidize the cannabis industry during the 2023-2024 tax year, according to the staff report. The county expects to collect $1,565,180 in cannabis fees and taxes and to spend $2,573,907 to manage the program.

During Tuesday’s meeting, the SLO County Board of Supervisors is scheduled to discuss amending its cannabis ordinance to allow retail marijuana shops in the county and to extend delivery hours until 10 p.m.

While the legalization of recreational marijuana has been a boon for California, the tax revenue generated continues to decline year over year.

Last year, the state raked in approximately $1.1 billion in cannabis tax revenue. However, the state collected $104.2 million in cannabis excise taxes in the first quarter of 2023, a drop of 32% from from the first quarter of 2022.

Amid a massive overproduction of cannabis in the state, prices for legal cannabis have fallen about 50% in six years. Meanwhile, pot users can find black market cannabis at 30% to 60% the price or choose to grow their own.

Inline Feedbacks
View all comments

With organized crime groups like Megan’s Organic Market aka Front Operation for Helios Dayspring, allowed to continue doing business in the San Luis Obispo County is it any wonder why the County is in the RED?

Why would anyone pay $20 or more for 1/8th of an ounce at the overpriced/overtaxed dispensary when they can either 1)grow it at home for free, or 2) buy 1/4 pound (128 times as much as the 1/8thoz) for $75 from the unlicensed sellers.? Grow your own!

For the same reason people pay stupid $ for booze and especially wine. Just wait for the cannabis lounges to open.

how about those cannabis lounges?

Well they fell to the veto, but we will keep working on it.

Well, the problem is that the program needs more and better management. We need to hire more of the best and brightest administrative minds to gets the program back in the black. Note: this is sarcasm designed to give us prolos a laugh, but mark my words, what’s going to happen is more of the same: the bean counters will toss more money at this program in hopes that it will magically start working. The counter people will remain so blinded by their greed that the program will never work.

I have an idea. Looks like either the County is overallocating costs to cannabis or is overstaffed. Address one or the other or both, and problem solved.

Why would you subsidize a drug business in the first place when you won’t help the regular businesses out. The reason is you thought you had a cash cow for the county tax coffers and it backfired. Any time a Government enity puts there paws into a business or problem it’s doomed from the start

I positively remember certain County Supervisors supporting this industry because of the needed MONEY it would generate for the County. They were not just Democrats butt contortionist too.