Santa Barbara County could become one of the nation’s leading cannabis sources, providing an opportunity for those already being squeezed out of other crops by competition and costs, based on an economist’s review of issues delivered Tuesday at the North County Economic Summit in Santa Maria.

Peter Rupert, executive director of the UCSB Economic Forecast Project, made no forecasts for what’s in store for the county, because all forecasts are more or less a shot in the dark.

“Do economists guess?” Rupert said. “Of course they’re guessing, because nobody has enough data to really make a forecast.”

Instead, he discussed the factors affecting the state of the county’s economy as well events and situations that could affect it — including the new legal cannabis industry.

Rupert said cannabis is a growing industry in the county, which already produces 22% of the state’s crop.

“And that’s going to increase,” he said, adding that legislation is being considered to allow interstate shipment of cannabis products, which currently is illegal. “When that happens, Colorado and Oregon (as producers) are going to go away.”

Rupert noted the marijuana employee salaries in those states are good, as they are in Santa Barbara County.

In this county, cannabis industry employees, on average, make more than workers in the occupations with most employees — field workers, retail salespeople, office clerks, cashiers, wait persons, food preparation and serving and personal care aides.

“Relatively speaking, these are pretty good jobs,” he said.

But once interstate cannabis trade opens up, Oregon and Colorado won’t be able to compete with Santa Barbara County’s lower overhead costs.

That’s because the colder climate in those states requires “running the heat and air-conditioning at the same time” to regulate the temperature for optimal cannabis production, Rupert said.

“What do we do here?” he said. “We open a window a bit.”

Rupert also said cannabis can provide a replacement crop for the ones that are dying out, like cut flowers, which at one time represented a major greenhouse industry in the Carpinteria area.

But the competitive pressure of low-priced flowers imported from Mexico and even Central and South America made it unprofitable for the South Coast’s growers to continue.

As a result, many have begun growing cannabis in their greenhouses.

“In fact, if you ride your bicycle through there, you get high,” Rupert joked, referring to the potent odor of cannabis that has raised the ire of residents and business owners in Carpinteria as well as other areas of the South Coast.

He listed two problems for the cannabis industry, and one is the ability to get permits.

Rupert noted Santa Barbara and Carpinteria are allowing only a handful of dispensary permits, but in Lompoc the number allowed “is infinite.”

But a more serious problem is the difficulty of cannabis operators to obtain banking services because bankers fear federal prosecution for money laundering if they accept money from cannabis growers.

Only 5% of cannabis businesses bank with institutions insured by the Federal Deposit Insurance Corp., which means the cannabis operators are unable to accept credit cards, deposit revenues, write checks and, in some cases, pay taxes.

That makes it a cash industry.

I know people that have $10 million buried in their land,” Rupert said. “This is crazy. And it’s something I hope is going to be fixed in the next year.”

The Secure and Fair Enforcement — or SAFE — Banking Act to solve the problem was recently ordered out of the House Committee on Financial Services. However, Skopos Labs, which assesses the probability of a bill becoming law, only gives HR 1598 a 33% chance of being enacted.

Conditional use permit for cannabis in AG-1 zones recommended by Santa Barbara County Planning Commission

News Editor

Mike Hodgson is news editor at the Santa Ynez Valley News, where he writes about local government, special events and the people who live in the Valley. He has been a photographer, writer, news editor and managing editor at weekly newspapers since 1972

Load comments