As county officials grapple with whether or not to allow the cannabis industry to grow on the Central Coast, one key issue is the cost of enforcement.
Initial estimates put the price tag for Santa Barbara County's initial enforcement efforts — licensing, compliance checks, inspections — at more than $2 million in the first year. From there, the cost is expected to grow to more than $3 million per year.
Part of that enforcement effort would require beefing up the sheriff's Narcotics Unit, which could ultimately double that force.
The Sheriff's Office now has five narcotics investigators and one sergeant assigned to its Narcotics Unit, according to sheriff's Lt. Brian Olmstead.
If cannabis is allowed within county borders, six investigators would need to be assigned to licensing, compliance and illegal grows, in addition to a supervising sergeant and two civilian employees to complete data analysis and other needed duties, Olmstead said.
"We are talking about a very hefty enforcement team," said 5th District Supervisor Steve Lavagnino.
Beyond cannabis investigations, the Narcotics Unit would have to continue its other duties — combating the spread of methamphetamine, heroin and other drugs, assisting in homicide investigations and surveillance, Olmstead said.
County leaders estimate that in addition to adding to Sheriff's Office personnel, they would need to add 14 full-time employees the first year, then an additional 10 employees over the next few years. Those employees would be assigned to various departments associated with regulating the cannabis industry.
If Santa Barbara County leaders agree to allow the cannabis industry to grow, the first step would be expanding the Sheriff's Office, the planning and development divisions, and other offices and facilities. Then, they would have to determine how to fund that expansion.
Deputy County Executive Officer Dennis Bozanich said a majority of the funds needed to support and enforce cannabis laws will have to come from the county's general fund.
"Funding for enforcement activities to reduce the unregulated and illicit cannabis market is largely anticipated to need to come from general county revenues," he explained.
Supervisors are in the process of developing a tax and fee structure for cannabis that could help pay for the expansion of services, with the options including levying gross receipts taxes or an across-the-board percentage tax on cannabis businesses. Voters will have the final say on what a tax structure will look like in a ballot measure to be proposed for either June or November 2018.
If a new tax structure is not created, it could prove devastating to county coffers.
"If a cannabis tax is not placed on the ballot or is defeated by voters, the cost of illegal cannabis enforcement would be competing for general revenues used for many other county programs," Bozanich said.
The county Board of Supervisors could decide that the financial risk may not be worth the reward and bar the industry from doing business in the unincorporated parts of the county. If they take that path, new taxes and a ballot measure would not be needed.
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