In a recent meeting, the county Board of Supervisors approved a $1.4 million reduction in the cannabis budget for the upcoming fiscal year 2025-26. This decision, made with a 4-0 vote while 4th District Supervisor Bob Nelson was absent, sets the cannabis budget at $5.3 million, reflecting a 20% decrease from the previous allocation.
The budget cuts affect several areas, including administration, auditing, planning review, and particularly law enforcement. To offset the financial shortfall, the supervisors increased licensing fees for cannabis growers. This move aims to address a long-standing issue where fixed costs related to cannabis have exceeded revenue for three consecutive years, leading the county to rely on carryover funds to fill the gap.
Brittany Odermann, deputy county executive officer, highlighted the program’s evolution and the loss of operators within the industry, stating, ‘The staff time spent on the cannabis program needs to be reimbursed. We’ve seen our numbers go down and down and down for cannabis, so we’re trying to find that balance.’
During the hearing, the supervisors also relaxed some regulations, including the criteria for background checks at cannabis operations and the acreage limits for cannabis cultivation.
Cannabis-related revenues peaked at $15.7 million in 2021 but have since dropped significantly due to market oversaturation. The board anticipates only $5.5 million in revenue from cannabis taxes for the upcoming fiscal year, beginning July 1.
The sheriff’s department faces the largest budget cut, approximately $472,000, which includes the loss of one deputy from the cannabis enforcement team. This reduction results in a savings of $242,000 in salary, along with $220,000 in overtime and $10,000 in supplies. Currently, the enforcement team retains $1.5 million of the total cannabis budget, accounting for over a quarter of the funds allocated for cannabis in 2025-26.
In a surprising move, the supervisors discussed reallocating some of the sheriff’s funding to other initiatives, such as fentanyl enforcement and mental health services, postponing detailed discussions until June 17 and 18 during broader budget hearings.
Since 2021, the sheriff’s cannabis enforcement team has investigated 65 cases involving illegal activities related to cannabis. However, 5th District Supervisor Steve Lavagnino expressed frustration with the effectiveness of current enforcement strategies. He remarked, ‘I think the whole landscape’s changed. We’re spending money where I don’t see the result. How many people have gone to jail from your cannabis team busting people?’
Advocates for a more streamlined enforcement strategy suggested that the board assign cannabis oversight to only a few deputies. Attorney Amy Steinfeld noted that law enforcement’s presence at legal operations often causes undue stress for workers.
Community members also urged the board to prioritize funding for programs benefiting underserved populations adversely affected by past drug policies. Ivan Vega and John Esteban from Future Leaders of America called for a youth fund supported by cannabis tax revenues, shifting focus from enforcement to community investment.
Supervisors expressed openness to redirecting funds towards education and mental health programs. Joan Hartmann, representing areas with extensive cannabis cultivation, stated she was influenced by the testimonies of community advocates.
The county has collected $59 million in cannabis taxes since 2018, averaging $8.4 million annually. A previous study predicted cannabis tax revenues could reach between $4 million and $64 million, but actual revenues have fallen short, worsened by a 57% decline in wholesale cannabis prices since 2021. The illegal cannabis market, estimated to represent over 60% of California’s total market, has further pressured prices.
Currently, only 46 cannabis operations exist in the county, down from 124 in 2018, reflecting the shrinking need for administration and enforcement personnel.
In addition to cuts in law enforcement, the District Attorney’s office will utilize grant funding instead of cannabis revenues for staffing related to cannabis-related cases, saving over $310,000. Other departments, including the Treasurer-Tax Collector and Planning Department, will also see reductions in staffing and budget expenditures.
The board also voted to limit the scope of mandatory background checks for cannabis applicants, aligning with state regulations by restricting checks to owners and partners with significant financial stakes, rather than all employees. This change aims to reduce barriers for immigrant laborers in the cannabis industry.
Lastly, the supervisors approved modest reductions in maximum allowable cannabis cultivation acreage and increased business licensing fees, with costs for outdoor growers rising significantly. For example, the cost for an outdoor grower’s initial business license application will increase from $10,330 to $17,622.
The recent changes reflect the county’s ongoing adjustments to the evolving cannabis landscape, focusing on budget realities and community needs.
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