(Editor's note: Although Santa Barbara County's controversial cannabis ordinance has been the focus of considerable political debate, there has been little analysis of it from the perspective of economics. Today Newsmakers presents an op-ed about local pot policy by author and academic Lanny Ebenstein, who holds a Phd from the London School of Economics).
Santa Barbara County’s existing cannabis policies are a disaster.
Regardless of who wins the current campaigns for supervisor in the First and Third Districts, one can only hope the Board of Supervisors will take action as soon as possible to remedy a fundamentally flawed approach.
The notion that cannabis sales will provide many millions of dollars of tax revenue for county coffers is badly mistaken.
Monopoly profits--such as are now the case--can exist only in a restricted market.
However, Santa Barbara County is merely a few months ahead of other counties in the state in legalizing production. As other counties allow cannabis to be grown on tens of thousands of more acres, the price of cannabis will plummet.
As the price of cannabis falls, its use will increase. In short, the upshot of existing policies will be to increase the use of cannabis, but not generate significant tax revenue.
The myth of the “model grower." Moreover, the cannabis industry is inherently incapable of being regulated. One of the leading growers in Carpinteria, Brand Farms, was touted as a model cannabis producer. It was an original member of CARP, the Cannabis Association for Responsible Producers.
However, a recent raid found multiple violations.
More than a million dollars of illegally stored cannabis and more than one thousand pounds of cannabis crude were found on site, together with an illegal cannabis oil extraction lab that can be combustible.
This is how a supposedly model cannabis grower had been conducting his operation. One can only imagine how others among the scores of cannabis growers countywide are managing their parcels.
See no evil… Existing county ordinances are creating a cannabis black market in Santa Barbara county like none before.
In the past 18 months, illegal cannabis confiscated by the county has been almost twice what licensed growers reported in sales in the last fiscal year!
In response to these deplorable conditions, existing county cannabis policy advocates have adopted a simple approach: See No Evil, Hear No Evil, Speak No Evil--and Full Steam Ahead.
Although there are promises of minor adjustments to county policy, a significant reworking is off the table. The existing policies that result in a substantial black market will go on.
The multiple violations of county ordinances by cannabis producers are creating an enforcement nightmare. Also detracting from any net tax revenue will be substantially increased compliance and enforcement expenses.
Bottom line. In choosing to promote cannabis production, Santa Barbara County policy-makers have made a huge mistake.
It is past time for a moratorium on new cannabis operations, very significant reduction in the acreage allowed countywide for cannabis production, and a sizable increase in the only 600 feet that cannabis growers must be located from schools.
Author Lanny Ebenstein is a past member of the Santa Barbara Board of Education. He supports Laura Capps in the !st District contest for supervisor.
Images: Lanny Ebenstein; The Sheriff's Department recently raided the Arroyo Verde cannabis farm, owned by Barry Brand, and found evidence of black market sales (LA Times); A pot greenhouse near Carpinteria (Melinda Burns).