Industry News

Central Coast cannabis industry in crisis

Central Coast cannabis industry in crisis

Central Coast cannabis industry in crisis

June 21, 2023


Amid plummeting tax revenues in the cannabis industry, San Luis Obispo and Santa Barbara counties have taken different routes with one electing to lower taxes and ease regulations and the other voting for stricter enforcement.

On Tuesday, the SLO County Board of Supervisors voted to lower the cannabis tax and to look into reducing fees for cannabis businesses, allowing retail shops in the county and increasing delivery hours.

Currently, SLO County charges an 8% tax on gross receipts. On Tuesday, the board discussed whether or not to move forward with an already approved 2% rate increase set for July 1.

Supervisor Debbie Arnold argued that county residents should not subsidize the cannabis industry. While Supervisor Bruce Gibson agreed that county taxpayers should not fund the pot industry, he said he would consider reducing the tax rate.

Supervisor Dawn Ortiz-Legg wanted to freeze the tax in order to allow the industry to prosper. She also wanted to expand the delivery hours from 9 p.m. to 10 p.m. and to allow retail stores.

The board then voted 4-1 to stop the 2% cannabis tax increase set for July 1, with Arnold dissenting.

SLO County’s Legal Counsel Rita Neal told the board they would need to have county staff come back with further proposed changes to the cannabis ordinance. The board then voted to bring back a proposed 6% cannabis tax, an extension of delivery hours, permitting pot shops in the county and lowering fees.

While Santa Barbara County projected $16 million in cannabis tax revenues for the 2022-23 fiscal year, it now anticipates it will collect less then $6 million.

Amid a massive over production 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.

On June 6, the Santa Barbara County Board of Supervisors voted to move forward with strict penalties for those growers failing to pay their tax payments on time. After missing even one payment, the board voted the county could revoke permits.

To date, Santa Barbara County has approved all requests to renew cannabis business licenses. On June 27, Santa Barbara County supervisors are scheduled to vote on amending the county’s 2018 cannabis ordinance.

This content was originally published here.