The picture portraying how Santa Barbara County plans to rake in the green became a little bit clearer on May 1.
That day, the county’s Board of Supervisors adopted an ordinance establishing a commercial cannabis business license by a 4 -1 vote, with 4th District Supervisor Peter Adam dissenting.
Now, anyone engaged in commercial activity, recreational or medicinal, including cultivation, possession, manufacturing, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or retail sale of cannabis and related products will be required to get a license. The licenses are non-transferable and need to be renewed annually.
Any entity conducting a commercial operation is required to get a license for each parcel it owns. The licenses further require operators to stay in compliance with land-use permits, state cannabis licenses, and requires that operators pay taxes.
Another piece of the ordinance establishes a multi-departmental cannabis compliance team of staff from Planning and Development, the Sheriff’s Office, the Ag Commissioner, the county’s fire and health departments, and the Treasurer-Tax-Collector.
The ordinance is effective either 30 days after the date the board adopted it or if the Coastal Commision certifies it before then.
Another key piece holding up the ordinance is that business licenses for cannabis operators will only become operational if the county’s treasurer is able to open an account in a “suitable financial institution to deposit monies related to cannabis.” Currently, the majority of cannabis businesses operate on cash, check, or money order only, as the federal government does not typically allow for cannabis businesses to deposit money in banks because the plant is listed as a Schedule 1 drug by the Drug Enforcement Administration. Banks, after all, are federally regulated.
On April 18, California’s Senate Banking and Financial Institutions Committee recommended SB 930, which would create privately financed banks under a program overseen by the state’s Department of Business and Oversight. The measure would provide a way for cannabis firms to deposit money in these state-licensed banks, which then issue checks to businesses for paying taxes, fees, and covering other basic costs. According to the LA Times, the firms would also buy state and local bonds.
“The question becomes, ‘With that amount of cash, what do you do?’—because you can’t deposit in a bank,” Sen. Bob Hertzberg (D-Van Nuys) said during a legislative hearing the day he introduced the bill. “We are faced with a significant public safety challenge.”
This article appears in May 3-10, 2018.