In a scathing report on Santa Barbara County’s cannabis regulations, the Santa Barbara County Grand Jury lambasts county officials for behaving unethically, and creating rules that cost the county financially and compromise quality of life.
“Santa Barbara County has
been in turmoil since the legalization of recreational cannabis in 2016,”
according to the 26-page report released last week. “There has been public
protest over cannabis odor, controversy between the cannabis industry and
traditional agriculture, the appearance of financial irregularities and
accusations of undue influence.”
The Santa Barbara County
Board of Supervisors created an ad hoc committee comprised of supervisors Das
Williams and Steve Lavagnino in 2017, to review the industry and create
regulations for marijuana cultivation. Meetings of the committee were not
subject to the Brown Act or opened to the public, two of the jury’s concerns.
“A more sobering
realization for the jury was that the governance in this matter took the form of
some supervisors aggressively pushing through their own agendas while other
supervisors meekly followed or resigned themselves to the inevitable,”
according to the report.
The Grand Jury also
blasted the board over cozy relationships between two county supervisors and
marijuana industry lobbyists. These relationships appear to have favored
marijuana cultivators over residents.
“While the jury
understands that sending emails to advocate positions favorable to the
interests of their client is part of the job of a lobbyist, it was unnerving to
the jury to see both the tone and timing of these emails,” according to the
report.
One of the most egregious
allegations is over a supervisor asking a lobbyist for advice on an issue as he
sat on the dais. During a March 20, 2018 Board of Supervisors meeting, a board
member sent an email to a cannabis lobbyist asking if they agreed with county
planning department staff’s recommendation. The Grand Jury report does not name
the supervisor.
The jury also noted
concerns over county employees leaving their government jobs to work as
cannabis consultants and lobbyists.
“This effort was amplified
by some of the cannabis industry lobbyists having recently left the employment
of Santa Barbara County,” according to the report. “It was described to the
Jury that some of these cannabis industry lobbyists could be regularly seen
roaming the halls of the board’s offices.”
As part of the early
approval process, marijuana cultivators were required to provide an affidavit
stating they had been growing on or before Jan. 19, 2016. But the county
required no proof, and offered no oversight.
“The major and obvious
flaw of this affidavit system was the lack of any required verification as to
the veracity of whether the applicant had indeed been growing cannabis as of
Jan. 19, 2016,” according to the report. “This concern was noted by the
planning commission that recommended a process that included a public hearing
wherein the applicant could prove their affidavit was truthful.”
The grand jury was also
concerned with the large amount of cannabis cultivated in the county. While the
yearly statewide consumption of marijuana is estimated to be between 1.6 and
2.5 million pounds, last year California cannabis cultivators produced approximately
13.5 million pounds. It is illegal to sell marijuana grown in California out of
state.
“Santa Barbara is just one
of 58 counties in California, 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,” according to the
report.
When cultivators smuggle
portions of their crops to states where it remains illegal, tax revenue is
rarely collected.
Both Williams and
Lavagnino’s focus appeared to be on a robust cannabis industry and the tax
revenue it could bring the county.
“I’m trying to generate
what could be $20 [million] to $40 million a year for the county,” Lavagnino
said at a board meeting in Feb. 2019.
But Williams and Lavagnino
pushed through a tax system that appears to help growers avoid paying taxes on
crops sold on the black market. Most California counties collect cannabis tax
based on the square footage of cultivation, while Santa Barbara County collects
taxes based on gross receipts.
Initially, Santa Barbara
County predicted cannabis tax revenues as high as $25 million. However, in the
2018/2019 fiscal year, with 217 acres of permitted marijuana cultivation, Santa
Barbara County collected only $6.8 million.
In comparison, with only
62 acres of permitted cannabis cultivation, Monterey County received cannabis
tax revenues of $15.4 million for the 2018/2019 fiscal year.
“The answer the jury
received was that the gross receipts method had the potential to be much more
lucrative than the square footage method,” according to the report. “To date,
the belief that using the gross receipts method would result in more taxes has
not proven to be true.”
The Santa Barbara County
Board of Supervisors has 90 days to respond to the Grand Jury report with
either an agreement to implement the recommendations, reasons why the county
will not implement the recommendations, or with a request for more time to
analyze the report.
The Santa Barbara County
Grand Jury’s findings and recommendations:
Finding 1: The impact of
cannabis production on the health and welfare of Santa Barbara County residents
was inadequately weighed and considered by the Santa Barbara County Board of
Supervisors.
Recommendations: That the
Santa Barbara County Board of Supervisors direct the county Planning and
Development Department director to prepare environmental impact reports
addressing each region of county after holding public hearings to evaluate
public concerns.
That the Santa Barbara
County Board of Supervisors direct the county Planning and Development
Department director to develop project objectives for the environmental impact
reports that reflect a balance between cannabis, traditional agriculture, and
county residents.
Finding 2: The creation of
a non-Brown Act Ad Hoc Sub Committee that was not open to the public led to a
lack of transparency and distrust by county residents.
Recommendation: That the
Santa Barbara County Board of Supervisors require all future Ad Hoc Sub
Committees be open to the public and subject to the Brown Act.
Finding 3: The Board of
Supervisors granted nearly unfettered access to cannabis growers and industry
lobbyists that was undisclosed to the public during the creation of the cannabis
ordinances.
Recommendation: That the
Santa Barbara County Board of Supervisors develop standards that require board
members to publicly disclose all access granted to lobbying individuals or
groups, especially while a matter involving these individuals or groups is
before the Board of Supervisors.
Finding 4: The conflict
between cannabis production and traditional agriculture is a major concern for
the continued existence of certain segments of traditional agriculture in Santa
Barbara County.
Recommendations: That the
Santa Barbara County Board of Supervisors amend the Land Use and Development
Code and Article II, the Coastal Zoning Ordinance to require all pending
cannabis land use permit applications be subject to a conditional use permit
review.
That the Santa Barbara
County Board of Supervisors amend the County’s Uniform Rules for Agricultural
Preserves and Farmland Security Zones to declare that cannabis cultivation and
related facilities are compatible uses on contracted land instead of as an
agricultural use.
Finding 5: The amount of
cannabis production allowed under the current cannabis ordinances is excessive
and has led to over-concentration in some portions of Santa Barbara County.
Recommendations: That the
Santa Barbara County Board of Supervisors require all applicants with cannabis
use and development permit applications and licenses pending, who claim legal
non conforming status, to prove their claimed status before the Santa Barbara
County Planning Commission.
That the Santa Barbara
County Board of Supervisors direct the county Planning and Development
Department director, in conjunction with the sheriff’s office, to eradicate all
cannabis grown on acreage claimed under legal non-conforming status when the
cannabis operator fails to demonstrate to the Santa Barbara County Planning
Commission that the planting of cannabis occurred prior to Jan. 19, 2016.
That the Santa Barbara
County Board of Supervisors direct the county Planning and Development
Department director to deny permits for the growth of cannabis on acreage
claimed under legal non-conforming status when the cannabis operator fails to
demonstrate to the Santa Barbara County Planning Commission that the planting
of cannabis occurred prior to Jan. 19, 2016.
Finding 6: The approval by
the Santa Barbara County Board of Supervisors of an unverified affidavit system
does not require proof of prior cannabis operations to establish eligibility to
continue to grow cannabis as a legal non-conforming use.
Recommendation: That the
Santa Barbara County Board of Supervisors require all applicants with cannabis
use and development permit applications and licenses pending, who claim legal
non conforming status, to prove their claimed status before the county Planning
Commission.
Finding 7: The affidavit
system does not require proof of prior scope of the cannabis acreage.
Recommendations: That the
Santa Barbara County Board of Supervisors direct the county Planning and
Development Department director, in conjunction with the sheriff’s office, to
eradicate all cannabis grown on acreage claimed under legal non-conforming
status when the cannabis operator fails to demonstrate to the county Planning
Commission that the planting of cannabis occurred prior to Jan. 19, 2016.
That the Santa Barbara
County Board of Supervisors direct the county Planning and Development
Department director to deny permits for the growth of cannabis on acreage
claimed under legal non-conforming status when the cannabis operator fails to
demonstrate to the county Planning Commission that the planting of cannabis
occurred prior to Jan. 19, 2016.
Finding 8: The option
taken by the Santa Barbara County Board of Supervisors to tax cannabis
cultivation using a gross receipts method was less reliable than the square
footage method used by the vast majority of California counties.
Recommendation: That the
Santa Barbara County Board of Supervisors amend Ordinance 5026 to tax cannabis
cultivation using the square footage method.
Finding 9: The Santa
Barbara County Treasurer-Tax Collector was not included in the creation of the
tax portions of the cannabis ordinance.
Recommendation: That the
Santa Barbara County Board of Supervisors require that all future ordinances
that involve taxation require the county Treasurer-Tax Collector be involved in
the creation of the ordinance.
Finding 10: Members of the
Santa Barbara County Chief Executive Officer’s office and county staff, unduly
and without apparent board knowledge, successfully sought changes to the April
26, 2019 Cannabis Advisory from the Santa Barbara County Air Pollution Control
District, an independent agency, eliminating a one mile buffer recommendation.
Finding 11: There has not
been effective odor control at the boundary of cannabis cultivation and related
activities, resulting in significant public outcry about odor, quality of life
and health concerns.
Recommendation: That the
Santa Barbara County Board of Supervisors suspend all county unpermitted
cannabis operations until proof of odor control at the boundary of their
operation is accepted by the county Planning Commission.
Finding 12: The Santa
Barbara County Board of Supervisors does not have a written code of ethics to
formalize its ethical standards and guide its decision-making processes.
Recommendations: That the
Santa Barbara County Board of Supervisors establish, staff and empower an
independent ethics commission with oversight over the board and its staff
members.
That the independent
ethics commission develop a code of ethics, review board activities on a
periodic and as-needed basis for compliance, and share its findings with the
public.
That the Santa Barbara
County Board of Supervisors require all its members to publicly disclose
receipt of campaign contributions from donors who have matters pending a
decision by the board.
That the Santa Barbara
County Board of Supervisors require those members receiving campaign
contributions from donors with matters pending a decision, to recuse themselves
from those matters or return the campaign contributions.
Calcoastnews.com
By KAREN VELIE
July 6, 2020
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