After 11-straight quarters of rising tax revenue from cannabis cultivators, Santa Barbara County received a actuality verify within the fourth quarter of the 2020-21 fiscal 12 months when revenues fell 34% from the earlier quarter and plunged 45% from the fourth quarter of 2019-20.
Through the 2021-22 price range workshops in April, supervisors mentioned making cannabis taxes an ongoing revenue stream slightly than one-time funds.
Workers really helpful contemplating solely a portion of the income ongoing earnings and sustaining a reserve to even out peaks and dips — like this one — within the stream of hashish taxes.
Fourth-quarter hashish tax income for the fiscal 12 months that ended June 30 was listed at $3.eight million in a report delivered to the Board of Supervisors on Tuesday.
By comparability, third-quarter income was $5.1 million, and 2019-20 fourth-quarter income was $5.5 million.
However Steven Yee, coverage and monetary analyst for the county, stated the report held some excellent news: Total hashish tax income for the 12 months — at $15.7 million — was up 29% from the earlier fiscal 12 months’s complete.
Yee stated the county doesn’t have entry to the info wanted to pinpoint the explanations for the fourth-quarter income slide.
“However given the data presently obtainable to us, it seems that, statewide, an oversupply of wholesale hashish product is starting to develop, a lot because it did in different states that legalized … grownup use of hashish previous to California, corresponding to Colorado and Oregon,” Yee stated.
He stated a glut available on the market drives costs down, which reduces gross sales receipts and, in flip, cuts tax income.
However Yee identified solely 11 of the county’s 112 hashish operators did not report gross receipts, the fewest because the inception of this system. He stated that signifies compliance with state and county rules is growing.
The hashish taxes collected for the fourth quarter got here from 58 operators who reported gross receipts, whereas 43 operators — really, 43 license holders — reported having no gross income for his or her operations.
Yee famous that some operators maintain a number of licenses and should have reported gross receipts for one sort of license however not the others.
Brittany Heaton, the county’s principal analyst for hashish, stated zero gross receipts is perhaps reported as a result of operations simply got here on-line throughout the fourth quarter or as a result of nursery license holders are supplying their very own cultivation operations.
She stated having zero product sales can also be probably an element of the seasonality of the hashish business.
Up to now, the county has obtained a complete of 181 functions for land use permits, of which 30 have been withdrawn, one was denied, 82 are below evaluate, 22 are pending, 34 have been issued and 12 are below attraction, in keeping with the report.
However operators who haven’t but obtained land use permits and enterprise licenses are quickly approaching a chokepoint — limits on cultivated acreage — that might pinch off their tasks.
“The cultivation caps are rapidly filling up,” Yee informed supervisors.
The county has set a cultivation restrict of 186 acres within the Carpinteria agricultural overlay space and 1,575 acres for the remainder of the unincorporated space. When these caps are reached, would-be operators who haven’t obtained land use permits and enterprise licenses might be disregarded within the chilly.
Thus far within the Carpinteria overlay space, permits have been granted for 46 acres, and functions for one more 176 acres are within the course of, bringing the entire to 222 acres, or 36 acres greater than the cap.
However in the remainder of the unincorporated space, the demand is almost double what’s obtainable, with 502 acres permitted and a couple of,619 acres within the pipeline for a complete of three,121 acres, or 1,546 acres greater than the cap.
Heaton suggested these with accredited land use permits to “get into the enterprise license course of instantly if they need a spot within the acreage cap.”
As of the tip of the fourth quarter, 24 enterprise licenses had been granted, with one other 58 pending for cultivation, 29 for nurseries, 10 for distributors and two for nonstorefront retail operations.
Yee stated a lot of the pending enterprise licenses are for candidates who haven’t but obtained land use permits.
As for retail storefronts, Heaton stated the No. 1 ranked potential operators for Santa Ynez and Los Alamos have submitted functions to the Planning and Improvement Division.
The highest-ranked potential operator for Orcutt — finalized as East Clark SB, doing enterprise as Cookies, after appeals have been resolved — has till mid-November to submit an utility for a store at 1604 E. Clark Ave.
“However we anticipate they are going to be submitting shortly,” Heaton stated.
— to lompocrecord.com