Santa Barbara’s Budding Cannabis Industry

Posted on Mar 18 by SEASONS Magazine

The new and improved legalized cannabis trade—which involves not just retail, but cultiva­tion, manufacturing, distribution and testing—is expected to generate such big bucks that Sacra­mento bean counters estimate $1 billion a year in additional state tax revenues. Photo by Paul Wellman.

The new and improved legalized cannabis trade—which involves not just retail, but cultiva­tion, manufacturing, distribution and testing—is expected to generate such big bucks that Sacra­mento bean counters estimate $1 billion a year in additional state tax revenues. Photo by Paul Wellman.

Story by Nick Welsh

Photos by Paul Wellman

So much for California’s much-vaunted cannabis revolution. More than 60 days after recreational dispensaries were officially “legalized”—and more than a year after voters resoundingly legalized pot statewide by approving Prop. 64—there’s still not a single recreational storefront to be found anywhere in Santa Barbara County. The wild Wild West has yet to materialize. Prohibition may be over—as some newspaper headlines have giddily proclaimed—but here in Santa Barbara, there’s been a conspicuous absence of champagne corks popping.

And for good reason.

On February 6—Ronald Reagan’s birthday coincidentally—the county supervisors passed an omnibus cannabis ordinance regulating just where cannabis can and can’t be grown. Likewise for its manufacturing and sales. The supervisors opened the door for up to as many as eight dispensaries to operate countywide in the unincorporated areas. Neighborhood critics, concerned about the impacts of the burgeoning industry, got bigger buffer zones between outdoor grows and their homes. It was something, but it’s not over. All this—the ordinance and tax plan—go before county voters this June. A simple majority is needed for passage.

To the extent cannabis can be legally obtained in Santa Barbara now or over the coming months, mostly it will be via one of the county’s 92 drive-by delivery services. These operate in the vast gray market spawned by medical marijuana. To the extent that cannabis can be bought—at least in the near future—at any retail establishment, it won’t be at any of the upscale sleek-chic salon-style emporiums envisioned by trendsetters like Canndescent, a statewide industry player headquartered in downtown Santa Barbara.

Marijuana being planted inside of a hoop house in Santa Barbara County. Photo by Paul Wellman.

Marijuana being planted inside of a hoop house in Santa Barbara County. Photo by Paul Wellman.

When it comes to retail cannabis, past is prologue. As they have for years, Santa Barbarans will still be able to buy their decriminalized bud in one of three old-school medical marijuana dispensaries. Coincidentally, all three are located in the chic-free, not-so-mean streets of Old Town Goleta. All three operate in the legal twilight zone created with the passage of Prop. 240 more than 20 years ago, which allowed for the dispensation of pot for medical purposes.

None of these three outlets, however, suggest any of the gleeful glam promised by repeal.

One is located discreetly in an industrial office yard near the airport just off Hollister Avenue. A few blocks away

Marijuana plants growing inside of a greenhouse. Photo by Paul Wellman.

Marijuana plants growing inside of a greenhouse. Photo by Paul Wellman.

stands another dispensary located in a one-story, cinder-block building that was somehow jammed onto the back of an old Quonset hut. There is no sign outside; the only thing indicating what takes place inside is an avocado green paint job, conspicuously fresh for the surrounding neighborhood.

A bearded young man enters the dispensary. A young woman follows suit a few minutes later. Another man comes out and departs. They all leave carrying white paper bags, stapled shut at the top. Inside the dispensary, a sign proclaims no recreational weed is sold. Sitting safely behind a bullet-proof Plexiglass window, a young man screens customers to make sure they’re legit.There’s a tiny slot at the bottom of the window where medical ID cards can be slipped through.

Marijuana being cultivated for commercial purposes. Photo by Paul Wellman.

Marijuana being cultivated for commercial purposes. Photo by Paul Wellman.

This definitely is not the second coming of Amsterdam—where cannabis cafes outnumber those peddling coffee. Only in Lompoc is the possibility of such cafes being entertained. There, no regulations, restrictions or even taxes will be imposed. Aside from the required buffer zones separating storefronts from schools and parks, market forces will dictate how many retail outlets the City of Flowers—originally a city of temperance—will have.

For the immediate and foreseeable future, what we’ve had is what will continue to be.

Change, however is coming. It’s inevitable. It’s irresistible. The financial stakes are too immense.

The new and improved legalized cannabis trade—which involves not just retail, but cultiva­tion, manufacturing, distribution and testing—is expected to generate such big bucks that Sacra­mento bean counters estimate $1 billion a year in additional state tax revenues. In Santa Barbara County, that’s about the same amount the beefed-up pot industry is expected to inject into the local economy. To put that in perspective, all sectors of the county’s agriculture market combined cur­rently generate $1.4 billion annually. To put that into even greater perspective, cannabis cultivation only occupies 396 acres of canopy; wine grapes occupy 21,000 acres and all other fruit crops, 18,000.

That’s a whole lot of cash for a relatively tiny footprint.

Little wonder that at almost every level of government, there’s a palpa­ble giddiness over revenues anticipated by legalized cannabis businesses. The new crop—and its attendant smorgasbord of value-added oils, creams, tinctures, vape cartridges and edibles—constitutes a genuinely new reve­nue stream. Better yet, it’s not oil. County tax collectors are conservatively guessing they can reap $20 million a year from sales generated by legalized cannabis. Privately, they whisper about raking in twice that much.

The truth is that no one really knows.

As a revenue source, pot—unlike oil—is something conservatives and liberals can agree about. Leading the charge for the new industry at the county board of supervisors are Das Williams—the liberal lefty eco-Democrat from Carpinteria—and Steve Lavagnino—the card-carrying Republican from Santa Maria. Their collaboration over cannabis has been so congenial that they’ve been dubbed “the Dooby Brothers” in the press.

Graham Farrar of Glass House Farms in one of his greenhouses. Photo by Paul Wellman.

Graham Farrar of Glass House Farms in one of his greenhouses. Photo by Paul Wellman.

In this context, it’s little wonder that Graham Farrar is champing at the bit. Farrar is the new face of a new industry that’s also been around Santa Barbara for a very long time. A Goleta native and father of two kids, Farrar—38—lives on the Mesa with his family. He’s been described as “a serial entrepreneur,” having cut his teeth first with software.com and later with Sonos. He’s now jumping feet first into the cannabis trade, having started a company that manufactures and sells the growing systems needed by any 21st-century pot plantation. More recently, he bought serious square footage in Carpinteria greenhouses. “It all starts with the plant,” he says.

When asked what his secret sauce is, Farrar says, “I have a lot of experience doing stuff that no one has experience doing. We figure out how to do stuff no one has ever done before.” For example, a few years back, Farrar launched an interactive app that allowed kids to access children’s books via their parents’ cell phones. That took off. For giggles, he and some buddies then created a global business selling Donald Trump toupees for tots. That was a hit too.

But this is really different. And however inevitable the cannabis revolution may be, Santa Barbara is still Santa Barbara. Everything takes forever. Nothing is easy. And politics are always complicated.

Even with a pot-friendly city council and a cannabis-savvy Santa Barbara police chief, the time allowed to craft new rules and regulations for what’s been an illegal industry that’s thrived underground has been exceptionally limited. One year. Under the new state rules, there are no less than 22 types of licenses required for the new pot-trepreneurs. This means there are multiple points of taxation to be considered: cultivation, manufacture, testing and retail to name a few. The challenge confront­ing decision makers? How to squeeze as much as possible from the new industry without killing the proverbial golden goose.

Late last year, the Santa Barbara City Council voted to approve five recreational storefront dispensaries, but there would be no tasting rooms, no cafes. With a new council sworn into office this January, that number was soon reduced to just three. Arguing in favor of the change were the usual neighborhood activists who didn’t want dispensaries near their homes and schools. But it also included executives from Canndescent, who expressed concern about market oversaturation. Their concern— again—was killing the golden goose. If too many retail outlets are allowed to operate, the crew from Canndescent argued, none would make enough to survive. If the point was to put black-market pot dealers out of business, they added, their survival was key.

But when it comes to regulation and taxa­tion, the real action is taking place in front of the county supervisors. It’s far from over. Although the supervisors recently adopted a tax plan—significantly reducing the tax rates from those initially proposed in response to industry complaints—no ordinance for the new industry has yet been crafted. The details are, as usual, devil­ish. Many focus on cultivation. What is the size of parcels where pot cultivation can take place? In hoop houses or greenhouses? Can manufacturing be done there, too? How far do they need to be from the property line: 600 feet? 1,000? 1,200?

Marijuana plants grow inside a hoop house located in Carpinteria. Photo by Paul Wellman.

Marijuana plants grow inside a hoop house located in Carpinteria. Photo by Paul Wellman.

The big stink, of course, is the intense skunk odors that have over­whelmed the small community of Carpinteria. In the past year, Farrar stated, more marijuana has been cultivated in California than ever before. (Even before then, economists reckoned California produced eight times more cannabis than its residents consumed.) Much of that’s concentrated off Santa Rosa Road near Buellton; cannabis and pinot noir grapes seem to do remarkably well there. But Carpinteria has felt the impact most intensely. Its greenhouses have exploded with cannabis, and the concentrated odors have all but shut down the local high school. It’s an issue. “There’s been more grown than in anytime in human history,” Farrar says.

Leading the charge against the new industry has been Anna Carril­lo, a retired school teacher and 45-year resident. “There are 51 growers in Carpinteria,” Carrillo says. “But if we have a problem with smells, we don’t know who to call because we don’t know exactly where they’re coming from.” Carrillo has been active with Carpinteria Valley Association (CVA) since 1976; now she’s in charge. She meets regularly with supervisor Williams and testifies frequently before him and the other supervisors. Carrillo bristles at the suggestion she’s some kind of pot prude. “I definitely supported decriminalization,” she says. But neither she nor CVA are about to roll over for the seemingly inevitable. If county supervisors seem eager to green-light the new industry as fast as possible, the Carpinteria City Council appears poised to take them to court. The issue—as always—is environmental review. The Carpinteria council put the county supes on notice that the environ­mental analysis understates the impact to housing, traffic and water.

If stench is the obvious and overwhelming problem, the sub-rosa fear among valley activists—formidable in the extreme—is that the supervisors will weaken the county’s hard-fought ordinance regulating where and how many greenhouses are allowed. Should that happen, it will be World War III.

Farrar—a newcomer to Carpinteria Valley—made a point to reach out to Carrillo. He gave her a tour of his facili­ties. He insists that new odor-clamping technologies can solve the stench prob­lem. She remains unconvinced, but appreciated the gesture. Farrar gets her concern. “If 19 out of 20 greenhouses are using this system and only one isn’t, then Carpinteria’s going to have an odor problem,” he says. “It’s up to us to do a better job.” Farrar says that as a child, he watched the orchards of Go­leta Valley get swallowed up by condo development. Maybe cannabis, he suggests, can help preserve agriculture in Carpinteria Valley.

Sheriff Bill Brown shares details from a pot bust. Photo by Paul Wellman.

Sheriff Bill Brown shares details from a pot bust. Photo by Paul Wellman.

The great irony of legalization is that it will spawn far more law enforce­ment action and prosecution where marijuana is concerned than Santa Barbara County has seen in many years. The premise behind Prop. 64 is that pot should be regulated and taxed, not prohibited. But in other states where legalization was approved, black-market cultivation and sales per­sisted. In Colorado, for example, 41 percent of the pot used originated from the black market. “There will still be Panga boats here in Santa Barbara, there will still be illegal sales and illegal grows in the national forest,” says Lt. Butch Olmstead of the Santa Barbara County Sheriff’s Office. “But if this goes through, we’ll now have a dedicated income stream for enforcement.” According to county projections, the new revenues would pay the sala­ries for three new enforcement deputies in year two and another five for screening applications and enforcing permit compliance. “Right now, we don’t have any dedicated funds for enforcement.”

In the meantime, the billion-dollar question remains—how much cannabis can Santa Barbara actually consume? The short answer: we’ll find out soon enough.

This story was originally published in the spring 2018 issue of Santa Barbara Seasons Magazine.

Share

« »


Browse similar topics:

Featured, In This Issue, Local Life, Read, SEASONS Magazine


Related Posts