Has Santa Barbara County’s cannabis dreams gone up in smoke?

August 24, 2025

By KAREN VELIE

Following legalization, the Santa Barbara County Board of Supervisors embraced the cannabis industry, which was projected to all but eliminate the illicit marijuana trade while generating significant tax revenue. But that’s not what happened.

“The cannabis program began with an expectation that it would provide a windfall of tax revenue to Santa Barbara County,” according to a Santa Barbara County Grand Jury report. “However, this expectation is no longer being met due to changing market conditions.”

In the 2020-2021 fiscal year, the county collected $15,746,600 in tax revenue while spending $8,946,600 on the program, leaving a profit of $6,800,000, according to the Grand Jury report. But the following fiscal year, the county was bringing in less revenue then its expenditures.

In fiscal year 2024-2025, the county collected $5,411,300 in tax revenue while spending $8,341,900 on the program, leaving expenditures running nearly $3 million more than revenues.

An oversupply of cannabis led to declining prices from a high of $1,200 a pound in 2020 to $250 a pound in 2025, according to the Grand Jury report. While the number of illegal grows has fallen in Santa Barbara County, black market cannabis continues to flood the market.

In addition, high fees and taxes and security requirements have forced some cannabis companies to close.

There are also concerns that some cannabis growers are underreporting, while selling product on the black market.

“The county’s reliance on self-reporting gross receipts has made it difficult to evaluate their accuracy,” according to the Grand Jury report. “This self-reporting system has made it challenging for budget analysts to predict revenue and for auditors to ensure compliance.”

In its June report, the Grand Jury recommends Santa Barbara County decrease the money it spends on enforcement against illicit cannabis cultivation, prioritize covering the direct cost of the cannabis program, and develop a centralized program for reporting and payments.

At the Santa Barbara County Board of Supervisor’s meeting on Aug. 19, Cannabis Program Manager Carmela Beck discussed the county’s proposed response to the grand jury report.

While Beck agreed with issues noted in the report, she said the county complied with many of the Grand Jury’s recommendations during budget discussions in June by cutting more than $1.2 million from the cannabis program to cover the projected shortfall.

Beck disagreed with the Grand Jury’s recommendation that it create a centralized program, saying it would be too expensive to integrate the county’s two separate licensing and payment systems.

The Grand Jury gave Santa Barbara County 90 days to respond to its June 20 report.

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