Will Montecito Go To Pot?

Private use of marijuana for recreational purposes is now legal for adults living in Montecito. Recreational use of marijuana for those 21 years and older was approved overwhelmingly by state’s voters in November 2016. The legal sale of adult-use cannabis projects at recreational dispensaries licensed by the California Bureau of Cannabis Control took effect on January 1, 2018.

The law stipulated that local jurisdictions are permitted to regulate or prohibit commercial cannabis activities within their jurisdiction. Thus, the Cities of Santa Barbara (including Coast Village Road), Goleta, and Carpinteria have established their own rules for cultivation, distribution, and usage, while activities within Montecito are regulated by the County of Santa Barbara. 

Where It Is Sold

On December 5, 2017, the Santa Barbara City Council adopted an ordinance to regulate and permit Commercial Cannabis Businesses in the City. In July 2018, the City ranked 14 applicants for recreational cannabis on a controversial point ranking system and awarded three commercial retail permits. They are:

• Golden State Greens – Located at 3516 State Street

• Farmacy SB, Inc. – Located at 128 West Mission Street

• Coastal Dispensary, LLC – Located at 1019 Chapala Street

When opened, consumers will get to choose between jars of marijuana buds with brand names like Train Wreck, Cookie Monster, Grape Ape, and Strawberry Cough. Pre-rolled joints sit beside vape pens, salves, tinctures, and incredible edibles that look like chocolate bars and gummy bears. 

Within the incorporated sections of Santa Barbara County, regulations provide as many as eight retail storefronts to be located in unincorporated portions of the county, with no more than two for each of the five supervisorial districts. The first adult-use recreational marijuana dispensary to open in the county was the Leaf Dispensary on January 18, 2019 in the City of Lompoc. As of last Friday, 27 applicants have applied for a county permit.

Home Delivery

Only in California is the delivery of marijuana legal everywhere, even to towns that have opted to ban cannabis-related businesses. This makes California the first (and only) state to legalize home delivery across all municipalities. These new rules guarantee legal protections to more than 100 state-licensed delivery companies and their customers.

Growing and Processing Rules

If you live in Montecito and are 21 or older, you can plant, cultivate, harvest, dry, and process up to six living cannabis plants in your private residence, or on the grounds of your residence. If you are growing cannabis, the plants must be in a locked space that is not visible to the public. Cities and counties may prohibit the outdoor cultivation of cannabis. It is against the law for you to use a volatile solvent for the manufacture of concentrated cannabis for your own personal use.

If you are 18 or older and have either a current qualifying physician’s recommendation, a valid county-issued medical marijuana identification card, or are a primary caregiver, you can possess up to eight ounces of dried marijuana and grow up to six mature or 12 immature marijuana plants, unless the physician’s recommendation specifies a higher number.

Montecito Marijuana Use

You can smoke or ingest marijuana anywhere in Montecito on private property. But you cannot use, smoke, eat, or vape marijuana in public places where it is illegal to smoke tobacco, or in places that have banned the use and possession of marijuana on their privately-owned properties. You cannot use marijuana within 1,000 feet of a school, day care center, or youth center while children are present.

Even though cannabis is legal under California law, you cannot consume or possess cannabis on federal lands like national parks, even if the park is in California because the cultivation, possession, sale, and use of marijuana is still illegal under federal law. It is also illegal to carry marijuana across state lines, even if you are traveling to another state where cannabis is legal.

Carpinteria Pot Capital

Proximity to Los Angeles (potentially the largest marijuana market in the world) has catapulted Santa Barbara County into issuing more cultivation licenses than any other county in California at this time. Of the approved growers in Santa Barbara County, 52 are clustered near the rustic beach town of Carpinteria, which some have dubbed “the Pot Growing Capital of California.” Cannabis cultivation lies mostly outside the city limits in the unincorporated area of the Carpinteria Valley under the jurisdiction of county planning and permitting. The City’s cannabis regulations, which do not allow for either cultivation or retail storefronts, have been adopted and will become effective in May. 

Carpinteria Valley greenhouses are capable of producing five to six harvests per year, whereas outdoor hoop-house farms produce one or two harvests per year, making greenhouses the growers of choice. Valley residents have complained about the smell of ripe buds permeating the air. This odor nuisance has been partially addressed by requiring greenhouse growers to install vapor mist odor control systems, but non-growers are still unhappy with the new smell in their community. 

Smoking While Driving

Marijuana negatively affects reaction times, coordination, and concentration, so drivers and passengers are prohibited from smoking marijuana in moving vehicles, regardless of whether marijuana is prescribed for medicinal use. If you are suspected of being under the influence of marijuana while driving, a law enforcement officer can pull you over and conduct a sobriety test. Legally, marijuana DUIs are treated just like any other drug DUI. There is currently no reliable “breathalyzer” test for marijuana intoxication, which can occur for up to three hours after marijuana is consumed.

Having an open container of marijuana in a vehicle while driving or riding in the passenger seat is against the law. If you have marijuana in a vehicle, it must be in an approved sealed package or container. Otherwise, it must be kept in the trunk of the vehicle, inaccessible to the driver and passengers. 

Smoking at Work

Even though marijuana is legal under California law, employers have the right to prohibit employee use while on the job and to prohibit employees from working while under the influence of marijuana. Know your workplace cannabis policies. 

Is Marijuana Safe?

As with diapers, it all depends. Supporters tout the value of marijuana in reducing chronic pain and nausea of chemotherapy and the treatment of Alzheimer’s, Crohn’s disease, epilepsy, and glaucoma, but no one says that marijuana is completely harmless. Initially, pot users may experience instant gratification, but over time, apparently, they rely on increased dosage to obtain the same high.

Marijuana affects the brain. The main ingredient, THC, enters the bloodstream and is carried to the brain where it reacts with the pleasure-seeking part of the brain to create a high euphoria: an intense feeling of happiness and excitement. Pot blurs reality and reduces inhibitions. Marijuana also affects the parts of the brain that control learning, memory, concentration, coordination, judgment, and time perception.

Using marijuana on a sporadic basis may not pose excessive harm to a person. However, according to the National Institute on Drug Abuse, frequent use of marijuana can lead to the development of problem use, known as a marijuana use disorder, which takes the form of addiction in severe cases. 

The Taxing Situation

The telltale odor of marijuana, pungent even a hundred yards away, is unmistakable. More importantly, it’s the smell of new money for California politicians seeking to replenish government coffers. 

The state has defined 17 separate marijuana-related activities that require state, local, and coastal commission licenses, broadly divided into cultivation, manufacture, distribution, testing, and retail sales. Every plant must be tagged and traced from farm to sale. Sellers of pot for recreational use must get an “A” license while sellers of marijuana for medical use must get a “M” license. State taxes on marijuana include:

• A state sales tax rate of 8.75%, plus locally imposed sales taxes

• A 15% state excise tax

• A cultivation tax of $9.75 per ounce of flower; $2.75 per ounce of trim

• Local taxes, which are hard to track across more than 500 cities and counties each of which sets its own tax regulations

The County of Santa Barbara adds its own local cut. As County Supervisor Das Williams noted in September 2017, “Let’s be honest: the largest potential for addressing our chronic county shortfall in the long run is tax revenue from marijuana.”

On February 13, 2018, the County Board of Supervisors adopted Ordinance #5026, which mandates: Every person who engages in cannabis operations, including the cultivating, manufacturing, producing, processing, preparing, storing, providing, donating, selling, or distributing cannabis or cannabis products within the unincorporated area of the County shall pay to the County Treasurer-Tax Collector a tax on the gross receipts of each of their operation’s activities involving cannabis or cannabis products, computed as follows:

• Nursery: 1% of gross receipts

• Cultivation: 4% of gross receipts

• Manufacturing: 3% of gross receipts

• Distributor (excluding distributor transport only): 1 % of gross receipts

• Retail: 6% of gross receipts

• Microbusiness: 6% of gross receipts.

These taxes shall be paid on transfers between each operation listed in subsections above, regardless of whether the activity is undertaken individually, collectively, or cooperatively, and regardless of whether the activity is for compensation or gratuitous use. 

Limited Use

The train has left the station. California was the sixth state to introduce the sale of recreational marijuana – Alaska, Colorado, Nevada, Oregon, and Washington paved the way. Ten states and the District of Columbia have approved recreational use; 23 others have approved marijuana for medical use with a doctor’s prescription. 36 states have given approval, if you include marijuana salves and lotions to treat pain or nausea. Only four states – Idaho, Kansas, Nebraska, and South Dakota – do not allow the use of marijuana-based products in any form. 

In Colorado, there are currently 356 marijuana dispensaries, both recreational and medicinal, more than there are McDonald’s and Starbucks combined. Aspen has one drugstore and seven marijuana shops. In the four years since marijuana was legalized, Colorado – with a population of 5.7 million residents – has collected nearly a billion dollars ($968,998,534) in taxes, licenses, and fees from medical and recreational users and providers. California, with seven times the population of Colorado, could generate $7 billion for state and local governments in its first four years.

Great Expectations

California is off to a slow start. The Golden State only generated some $300 million in state taxes and fees in 2018, its first year of commercial legalization. 75% of cities and counties in the state opted out of cannabis commerce. Legalization has been slowed by licensing restrictions, debates over regulation, and hamstrung by cities and towns that do not want cannabis businesses on their streets.  

The $300 million California collected in its first year of legal sales was below estimates, but far greater than other states that legalized marijuana in 2016. California, Nevada, Massachusetts, and Maine voters all ended marijuana prohibition at the ballot box. Massachusetts may collect $60 million in its first year, which is ongoing. Nevada collected $69.8 million in its first year. Those are tiny fractions of California’s tax total, but our state is so much bigger.

Challenges to Growth

Now that California state, and especially localities, are taxing cannabis to death, will consumers continue to purchase pot in the illegal marketplace to avoid tax loads that can range up to 50% in some communities?

If marijuana is legalized nationwide, will cigarette companies, stunned by sagging sales, add pot to their cigarettes to give smokers an added lift and boost flagging cigarette and cigar sales?

Will marijuana continue to be a cash-only business with all of the potential criminal elements that engenders? Since marijuana is still illegal under federal government regulations, what can be done to develop safe banking and credit card relationships for marijuana businesses? 

Will state and local government find that the added costs of regulation, treatment centers, drug driving, domestic abuse and health related problems exceed the revenue collected? 

We are likely to have answers to those questions within the next decade.