State completes Santa Barbara County cannabis business licensing audit

Santa Barbara County will change its cannabis licensing application as it implements suggestions from the State Auditor’s Office. 

“To my knowledge, this is the first time cannabis has been audited at the state level. It’s relatively new with recreational level,” Deputy County Executive Officer Brittany Odermann told the Sun. “It’s typical that the Legislature will put in requests to audit various items, including cannabis. This is the first time, and it may be the last time.” 

The state auditor looked into six California jurisdictions—Santa Barbara and Monterey counties, and the cities of Fresno, Sacramento, San Diego, and South Lake Tahoe—and reviewed their cannabis permitting processes. 

“In general, we determined that cities and counties (local jurisdictions) could improve their cannabis permitting process to increase public confidence and mitigate risks of corruption,” State Auditor Grant Parks said in the audit. “Our review found that the local jurisdictions we reviewed did not always include several best practices in their permitting policies that help ensure fairness and prevent conflicts of interest, abuse, and favoritism.”

click to enlarge State completes Santa Barbara County cannabis business licensing audit
File photo by Jayson Mellom
MORE CANNABIS ANALYSIS: The California State Auditor’s Office completed a cannabis licensing audit for six jurisdictions, including Santa Barbara County, and made several recommendations that could improve transparency and accountability. This follows the county’s efforts to revamp its cannabis tax system, set to go before the Board of Supervisors May 14.

This audit is separate from the county’s efforts to analyze and update its cannabis tax, with the Treasurer-Tax Collector’s Office conducting financial audits of operators and the County Executive Office presenting new possible tax measures to go on the ballot. Odermann added that the cannabis tax measures will be back before the Board of Supervisors on May 14. 

Regarding the state’s analysis, Odermann said that the County Executive Office is working on implementing an impartiality statement within the business application approval process—which requires county staff responsible for approving licenses to go on the record with a statement that they have no financial or personal interest in a business moving forward. 

“These statements aren’t required but as a best management practice given the nature of the cannabis industry and how the public might perceive applications, I think the state looked at a few jurisdictions and thought this would be a good practice to ensure public confidence, so we’ll be implementing that as well,” she said. 

The second change creates a system where the County Executive Office can see if an operator passes required background checks. The current system requires the Executive Office to reach out to the Sheriff’s Office to ensure that operators completed required background checks, and the state suggested a system to have all of that information in one place for better organization, Odermann said. 

 “It’s an added layer and an enhancement. Not necessarily additional work because the Sheriff’s Office is already doing [background checks],” she said. “It’s really nuanced. It’s just a small enhancement that will just ensure that everything [that] goes with the business license [is] in one spot.” 

There’s no deadline for the county to make these changes, but the Executive Office is hoping to add everything by the end of this fiscal year, June 30. 

“While we don’t need to make any real big changes and nothing is required of us, we are taking this information seriously and looking at implementing these enhancements in order to really follow best practices because that’s good government,” Odermann said.

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