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California’s Billion-Dollar Weed Boondoggle

There’s a lot that’s unpleasant about living in California’s cannabis capital.
February 23, 2023
California’s Billion-Dollar Weed Boondoggle
An indoor grow room at a California marijuana farm. (Photo credit: Bob Berg / GettyImages)

It wasn’t so long ago that visitors to bucolic Santa Barbara County were greeted with an aromatic spray of ocean breezes perfumed by citrus. Oh my, they crooned.

These days, you are more likely to get whacked by a wall of rancid skunk as you glide across the border from Ventura County to Santa Barbara County. In other parts, the olfactory distress is accompanied by a blaze of visual blight: Where once there were fields of green there are now seas of white plastic tents.

So much has gone so wrong with California’s ballyhooed venture into the cannabis business, it’s impossible to pinpoint its most singular failure. For all those states preparing to plunge into the weed business—caution: California is a flashing red light.

To anyone familiar with California’s long history with marijuana, this may be hard to believe: Santa Barbara is now growing more weed than Humboldt County.

For the past five years, furious residents of Santa Barbara County have waged a battle against a unilateral decision by supervisors to turn the county into the largest marijuana “grow site” in the state, likely the nation. The decision has been bitterly opposed, sued over, protested, and appealed by the county’s residents, city officials, schools, and traditional agriculture concerns—the producers of wine, avocados, citrus, vegetables. (Full disclosure: My husband and I live in Santa Barbara County—downwind from some of the grows—and have backed grassroots groups fighting for basic acreage limits and odor enforcement.)

Let me state the obligatory caveat: A majority of Californians—myself included—voted for and support the legalization and decriminalization of cannabis use. Amen.

But no one voted for the installation of industrial-sized massive grows of marijuana in vented greenhouses or open fields with no mandatory odor and air-quality controls, no acreage or license limits—and enforcement at about zip.

Did I mention that cannabis is a failing business? California growers claim their marijuana operations are hemorrhaging revenue despite every known carrot and concession from the state. Sacramento even recently suspended state cultivation taxes—something that California, projecting a $22.5 billion deficit this fiscal year, can ill afford. Yet with wholesale cannabis prices falling, according to SFGATE, by as much as 95 percent since 2016, many smaller producers have been forced out.

All of which is to say, California’s weed boondoggle arises from the inevitable woe of ignoring supply and demand economics. The state’s decision to greenlight massive amounts of cannabis glutted the market at three to five times demand, driving down prices. At the same time, it catalyzed a huge illegal market that has outperformed the legal market by two or three times. Many growers simply sell to the black market, thus making the state an unwitting partner in crime, though no one in Sacramento has any illusions as to what is happening.

In Santa Barbara County, tax revenues from pot dropped an astounding 45 percent over the last two fiscal years, and are still trending downward. The county’s billion-dollar-plus budget gets a bare trickle from cannabis, not enough to even cover enforcement. At the same time, the cannabis industry costs the county millions in its adverse impacts from litigation costs, harm to local agriculture, and lost business, not to mention damage to its “brand” of sun, sea, and wealth. Plus there are the seemingly endless appeals filed by exhausted yet determined residents and businesses against the county and cannabis growers that county attorneys and staff are ordered to defend.

Then there is the stink. Thousands of odor complaints have been filed with Santa Barbara County.

Vintners, responsible for a reliable multibillion-dollar crop, complain that the odors and byproducts of cannabis terpenes stink up their tasting rooms, negatively impact their vineyards, and deplete precious water sources. Some have sued or appealed; other have threatened to pack up and leave for more hospitable climes.

The blowback has been especially harsh from the well-heeled residents of Padaro Lane—home to George Lucas, Kevin Costner, Conan O’Brien, and a half dozen major CEOs. Changing winds deliver the skunk stench from nearby pot grows onto their multimillion-dollar properties and pristine beach. A year ago, said muckety-mucks flexed their collective muscle, and, along with the grassroots organization Concerned Carpinterians, succeeded in nixing the gubernatorial appointment to the California Coastal Commission of the most culpable county supervisor, Das Williams.

Williams—dubbed “the industry’s reigning lap dog” by Jerry Roberts, Santa Barbara’s best known reporter and a former editor of the San Francisco Chronicle and the Santa Barbara News-Press—has taken $100,000-plus in campaign donations from local cannabis growers and lobbyists since legalization. That’s a huge industry contribution by Santa Barbara standards. Despite years of local fury and bad press, Williams has adopted a Trumpian modus operandi: doubling-down, installing his chief of staff as head of the local Democratic party, and refusing to amend the county’s cannabis ordinance—which would be the simplest and most effective solution. Williams also shares Trump’s partiality to attacking reporters—privately but also from the Board of Supervisors’ podium—as well as the grand jury, not to mention constituents at odds with his policies.

Local and national media have squarely laid blame on Williams and his North Coast ally, Steve Lavagnino. As documented in a withering grand jury report, the two  collaborated with cannabis lobbyists in writing the cannabis ordinance via a closed-door ad hoc subcommittee, thus bypassing the transparency and openness demands of the state’s sunshine law.

Among the stunners was the supervisors caving to lobbyists’ demand that growers be allowed to “self-declare” their weed profits, and hence the taxes they owed. That’s akin to being allowed to tell the IRS what you believe you should pay. In the absence of enforcement, many growers simply don’t even bother reporting revenue.

Santa Barbara supervisors, who have given themselves pretty much unfettered powers and have no term limits, also nixed mandatory effective odor control and enforcement. As anyone who lives near industrial cultivation of marijuana knows, it stinks. It’s a foulness that has engulfed nearby schools, businesses, and residences. A surge in allergies, asthma, and respiratory illnesses prompted several Santa Barbara pulmonologists to join an appeal to the U.S. attorney for the Central District of California to intervene in the matter.

In December, the Los Angeles Times chronicled a stunning uptick in cannabis worker deaths from fumes in greenhouses and hazards in open fields. State cannabis authorities and OSHA have a dismal record when it comes to worker health and safety or the growing case load of  respiratory and immune illnesses related to cannabis grows. Numerous doctors in Santa Barbara, though cautious not to breach patient confidentiality, say they have said they have seen an increasing load of patients with respiratory issues who live near the cannabis nurseries or grows.

Greenhouse workers, of course, have it worse than complaining residents who might be a mile or two away. One prominent doctor told me that when she informed a young cannabis worker that she needed to find other work or face irreversible respiratory issues, the woman responded, “I can’t. I get $18 an hour plus they pay for a doctor and I am supporting a family in Mexico.”

Beyond the workplace, the disregard for the general public health is jaw-dropping. For example, the high school in Carpinteria is surrounded by five massive cannabis operations—all grown in vented greenhouses. One weed nursery is just 360 feet from the high school, despite federal law that requires a 1,000-foot buffer from schools and child-care facilities. Driving by the school can be a stinkfest—prompting health warnings to visiting sports teams about playing on school fields. Inside, students and teachers have complained of nauseating odors and headaches. One neighbor of ours said his wife often felt nauseated just dropping their children at the school.

Three quarters of the students at the school are Hispanic, some from undocumented families. Santa Barbara supervisors shrewdly designated weed grows to lower-income areas. Not one marijuana grow—nor a single cannabis dispensary—was proposed by Williams for adjacent Montecito, the storied home of the rich and famous.

The two Carpinteria school board members who vocally opposed the pot grows being adjacent to schools, along with “donations” from same to the school district—citing federal law on both counts—well, they no longer serve.

The stink pervades more than the air. California’s legalized cannabis has been a boom business for sleazy politicians, tidily summed up by one LA Times headline: “‘$250,000 cash in a brown paper bag.’ How legal weed unleashed corruption in California.” It’s not hard to imagine how or why. Armored trucks carrying large amounts of cash (since federal law prohibits banks from offering services to cannabis businesses) can be seen coming and going from marijuana nurseries and grows throughout the state.

Cannabis may, of late, be a floundering business, paying a trifle in taxes—but it’s all cash, all the time.

An eye-popping LA Times investigative series chronicles how cannabis profits and tax revenues have nosedived while the illegal market, often tied to crime or cartels, has surged. At the same time, veteran mom-and-pop weed operations have been put out of business, displaced by corporate interests from out of state. That said, even major cannabis companies have taken big hits. Cresco, one of the country’s biggest, packed up its operations in Carpinteria late last year (community pushback also played a role).

And, as Jerry Roberts puts it, the county’s board of supervisors has become “a wholly owned subsidiary” of the cannabis lobby.

Said supervisors installed their own “Cannabis Czar,” Dennis Bozanich, to help draft the ordinance and recruit business to the county. When asked in 2018 to describe his vision for cannabis in Santa Barbara, he quipped, “world domination.” These days, Bozanich is a cannabis lobbyist pitching his product to the very same supervisors.

The pot industry’s coziness with politcos is not just a smelly Santa Barbara problem. While many remember that it was Gavin Newsom’s dinner at the French Laundry during the state’s COVID shutdown that kicked off his (ultimately failed) recall in 2021, few remember that the birthday honoree was Jason Kinney, Newsom’s state-level pot czar. Kinney is now a major cannabis lobbyist for Axiom, which just happens to have a bustling office in Santa Barbara.

Arguably, the greatest success of the cannabis lobby has been messaging. Consider how a state in a red-alert drought encourages mass production of one of nature’s biggest water guzzlers. Right behind almonds and alfalfa in the water Olympics, cannabis has sucked not a few of the state’s rivers, streams, creeks, and aquifers down to perilous levels. (Recent rains have helped but scientists warn they will not reverse the long-term trend.)

Moreover, many weed growers use county and city water run through reverse osmosis, a purification technique notorious for wasting a huge portion (reportedly between 50 to 75 percent) of the input water.

Drought and fire have long been California’s seasons. In a state famously ravaged by annual wildfires, none other than the Cannabis Business Times reported on an  environmental journal’s analysis that concluded that Santa Barbara County “has more than 95% of its cannabis farms located in new or intensifying hot spot zones.”

At least one illegal extraction operation in the hills of Montecito did catch fire. “Numerous extraction labs have exploded in this county,” the Santa Barbara county sheriff warned in a press release back in December 2017. “Additionally, these cases of fuel were left at the residence in the path of the oncoming [Thomas] fire making the situation even more volatile and dangerous.”

One can imagine the pun-filled headlines and SNL sketches about odoriferous smoke if these weed operations get ignited. But for those of us who live with the reality of annual wildfires—my husband and I were evacuated eight times in the last six years—it’s not quite as funny.

Considering the pot industry’s shrinking bottom line, plus the burdens that the industry and its alliance of compromised politicians inflict on communities, this is a lose-lose deal.

So if you want to get loaded, knock yourself out. But if you’re hoping to get rich on the cannabis craze, take a pass on the California model.

It’s been a bummer.

Correction (Feb. 23, 2023, 10:50 a.m. EST): As originally published, this article misstated the name of the establishment that was the site of the incident that set off the Gavin Newsom recall effort. The restaurant was the French Laundry, not the French Bakery.

A.L. Bardach

Ann Louise Bardach is a journalist and author of several books, including Cuba Confidential and Without Fidel. She won the PEN USA Award for Journalism for her reporting on Mexican politics. She lives in Santa Barbara County.