To better investigate cannabis businesses that are not paying their required taxes, Santa Barbara County plans to enter a pilot program that provides access to the state’s Track-and-Trace database.

The database was designed to track cannabis products through the supply chain, from cultivation to processing to distribution to sale.

The county Board of Supervisors approved an agreement with the California Department of Food and Agriculture on Tuesday, along with the county’s latest cannabis tax report.

“This pilot program will provide the county with access to the inventory records associated with 250 state licenses located in this county,” fiscal and policy analyst Steven Yee wrote in a report to the supervisors. “Gaining access to Track-and-Trace data is critical in order to initiate a board-directed tax compliance audit, as well as performing compliance and enforcement activities.”

Monterey and Yolo counties are also participating in the pilot program, he said.

Local cannabis businesses paid $2 million for the second quarter of 2019-20 (October through December), making it $4.8 million for the fiscal year so far.

Forty-three operators reported gross receipts and paid taxes, 48 operators reported zero gross receipts (Yee noted that some outdoor grows go dormant in winter), and 15 operators did not submit reports as required.

The County Executive Office and Treasurer/Tax Collector are starting enforcement actions against operators who failed to file reports.

The county is also investigating affidavits submitted by “legal nonconforming” cannabis cultivators who are allowed to continue operating while they apply for local permits and business licenses.

Planning and Development Department staff responded to 75 odor complaints — 66 in the Carpinteria Valley — in the second quarter, and the Cannabis Compliance Team reported eight enforcement actions, with four arrests and plants/products seized or destroyed.

Santa Barbara County has dozens of applications being processed for land-use entitlements and business licenses, and the proposed acreage far exceeds the caps of 186 acres for the Carpinteria Valley agricultural overlay, and 1,575 acres for other unincorporated areas.

There are 227 state licenses expiring within 60 days in the county, and “staff will review the status of those licenses to determine whether we continue to support their application,” according to the report.

Board of Supervisors Denies Appeal of Busy Bee Organics Cannabis Farm

Last week, the supervisors voted 4-0, with Peter Adam absent, to deny the appeal and approve the Busy Bee Organics cannabis cultivation project, with changes to the conditions imposed by the Planning Commission.

The supervisors approved 22 acres of cannabis cultivation (more than the 18 acres the Planning Commission approved), with a maximum 5 acres of hoop structures, and limits on where hoop structures can be installed.

They allowed marijuana to be dried on site after harvest, and modified the odor-abatement plan.

The changes were “completely acceptable” to Busy Bee owners Sara Rotman and Nate Diaz, a representative told the supervisors.

Attorney Mark Chytilo represents the Santa Barbara Coalition for Responsible Cannabis, which appealed the approval, and said 22 acres is “an excessive amount of cultivation on this parcel,” which is zoned AG-2 and is just west of Buellton along Highway 246.

He also said the fans and windscreens proposed for the odor-abatement plan will likely have noise and visual impacts for neighbors.

Supervisor Joan Hartmann represents the Third Supervisorial District, including the Highway 246 corridor where many large cannabis farms are proposed.

“This is really our first appeal for an AG-2 property,” she said at last week’s hearing. “I think it reveals some serious problems with the ordinance. I think particularly our policies on non-conforming uses and allowing those to expand and then bless those with a permit, that is something that first and foremost in my mind needs to be addressed and needs to be addressed soon.”

She said the county cannot put the whole burden of ordinance problems on this project, and voted to approve it.

As of November, when the Planning Commission heard the appeal of Busy Bee’s initial permit approval, neighboring residents and farmers had challenged all six cannabis cultivation projects given staff approval in the Third District.

Commissioners denied the appeal, but were concerned about the cumulative effect of such large grows, as well as each operation’s impact.

They were unsure about compatibility with neighbors and other agriculture, including vineyards, and decided to reduce the acreage and require buffer zones on property lines.

Noozhawk managing editor Giana Magnoli can be reached at Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.