SANTA BARBARA COUNTY, Calif. — Santa Barbara County’s once-high hopes for cannabis tax revenue are going up in smoke, with a new Grand Jury report warning the program may soon become a financial burden without major reforms.
Tax revenues peaked at $15.7 million in fiscal year 2020–21 but are projected to bring in just $5.4 million this year. At the same time, compliance, enforcement and administrative costs are climbing. The Grand Jury warns the program could run a $3.8 million deficit by fiscal year 2025–26 if changes aren’t made.
The drop in revenue is driven by an oversaturated market, declining wholesale cannabis prices, competition from illegal suppliers and high costs of doing business. The wholesale price of cannabis has fallen from about $1,200 per pound in 2020 to as low as $250 this year, the report said…