Frequently-Asked Questions

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Local Cannabis Business Licensing

No.  Personal Use means the cultivation, harvesting, drying, or processing of cannabis plants with the intent to possess, smoke, or ingest cannabis or cannabis products for one's own individual use or by a primary caregiver for their qualified patient(s) in accordance with State law. 

The following cannabis activities are exempt from needing a cannabis business license:

  • Possession, processing, storage, transportation, or donation of not more than 28.5 grams of cannabis or not more than eight grams of concentrated cannabis by persons 21 years of age or older.
  • Cultivation in a legally established, secure dwelling or an enclosed, legally established, secure building that is accessory to a dwelling of up to six cannabis plants by persons 21 years of age or older as allowed pursuant to Health and Safety Code Section 11362.1(a), as may be amended, and as allowed by the County Land Use and Development Code Section 35.42.075, Montecito Land Use and Development Code Section 35.422.055, and Coastal Zoning Ordinance Section 35-144U, as may be amended.
  • Legal nonconforming medical marijuana cultivation sites established by County Code Section 35-1003, until they are terminated, pursuant to County Code Section 35-1003.C, as may be amended.

Yes.  Commercial cannabis activity is, recreational or medicinal, including the cultivation, possession, manufacturing, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or sale of cannabis and/or cannabis products as provided in this Chapter 50 of the County Code. 

A Cannabis Business License is required before the start of a cannabis business or, if the business is in operation and a license possessed, prior to the expiration of such license. 

It is unlawful for any person to conduct, engage in, or allow to be conducted or engaged in a commercial cannabis activity in the unincorporated area of the County, unless the County has issued such person a business license under Chapter 50 of the County Code and the license is in effect.

Any person who seeks or obtains the following State licenses is also required to obtain the corresponding Santa Barbara County Cannabis Business Licenses as identified below:

State License Types* Santa Barbara County Cannabis Business License Required
Cultivation Licenses - Type 1, 1A, 1B, 1C, 2, 2A, 2B, 3, 3A, 3B, 5, 5A, 5B & Processor Cultivator
Cultivation Licenses- Type 4 Nursery
Manufacturing – Type 6 & 7, N (edibles/topical) & P (packaging) Manufacturer
Testing – Type 8 Testing
Retailer – Type 9 & 10 Retailer
Distributor – Type 11 Distributor
Microbusiness – Type 12 Microbusiness

* Pursuant to Business and Professions Code § 26050, as may be amended.

Failure to possess, or operating without, a valid cannabis business licenses for each and every cannabis operation as required by Section 50-3 of the County Code, unless exempted in Section 50-5 County Code, is a misdemeanor.

No. A Cannabis Business License is issued to and covers only the licensee(s) identified on the cannabis business license and only the premises identified on the cannabis business license.  A Cannabis Business License is not transferable and automatically terminates upon transfer or change of ownership pursuant to Section 50-23 of the County Code. A Cannabis Business License does not run with the land.

First, you need to have a County land use or conditional use permit

Second, complete a County Cannabis Business License Application (coming soon) and compile the required documents

Third, submit the entire package to the County Executive Office at 105 E. Anapamu Street, Suite 406, Santa Barbara, CA 93101 with your Cannabis Application Fee deposit of $3,250. The County Treasurer has only authorized check and money order payments for cannabis related business licenses. Any check or money order used to pay for cannabis related licensing must clearly include the payer's information (particularly on money orders). Cash payments will not be accepted at this time.

First, you need to have a County land use or conditional use permit

Second, complete the Cannabis Business License Application (coming soon) and compile the required documents

Third, submit the entire package to the County Executive Office at 105 E. Anapamu Street, Suite 406, Santa Barbara, CA 93101 with your Cannabis Application Fee deposit of $3,250. The County Treasurer has only authorized check and money order payments for cannabis related business licenses. Any check or money order used to pay for cannabis related licensing must clearly include the payer's information (particularly on money orders). Cash payments will not be accepted at this time.

First, you need to participate in the Cannabis Zoning Review process.

Second, you need to acquire a County land use or conditional use permit.  

Third, complete the Cannabis Business License Application (coming soon) and compile the needed attachments. 

Fourth, submit the entire package to the County Executive Office at 105 E. Anapamu Street, Suite 406, Santa Barbara, CA 93101 with your Cannabis Application Fee deposit of $3,250. The County Treasurer has only authorized check and money order payments for cannabis related business licenses. Any check or money order used to pay for cannabis related licensing must clearly include the payer's information (particularly on money orders). Cash payments will not be accepted at this time.


Most importantly, you will need to have a land use or conditional use permit for the cannabis operations site.

Then, complete and sign the Cannabis Business License Application form (coming soon) and collect all required attachments.

All cannabis business licenses shall be valid for one (1) year from the date of issuance by the Treasurer-Tax Collector, unless suspended or revoked by the County pursuant to Section 50-27 of the Santa Barbara County Code.

The Cannabis Business License Application Fee deposit is $3,250.  As county staff reviews your application, they will charge their hourly rate against that deposit.  The deposit was set at about 80% of the time estimated to complete the application review.  If the operation and application is complex it may take more time, so we may be invoiced for the additional hours.  If it is simple and complex, you may receive a refund..  This deposit fee is only charged once for each application.

After an application is approved, the new licensee will pay a Cannabis Business License fee of $2,500.  This is for the first year only.  It includes the costs of providing the actual license and the compliance review work, including site visits, over the first year of licensing. Again, it is a deposit, so we will only bill actual hours against that deposit. 

At the end of the first year, the Cannabis Business License Renewal Fee deposit is $3,600. This will include the processing costs of the renewal plus the compliance review over the subsequent years that the license remains active.  Again it is a deposit, so we will only bill actual hours against that deposit.  This Renewal Fee would be ongoing annually as long as the license remains in effect.  If a license is revoked for noncompliance, the Renewal Fee deposit will not be refunded.

Most likely, you will provide the State of California with a copy of your Santa Barbara County Cannabis Business License to support your application or renewal of your annual State cannabis license.

Yes, in two cases.

Cannabis storefront retail licenses are limited to eight countywide, with no more than two in any supervisorial district.  There will be a pre-qualification process and random selection process conducted to establish a list of eligible storefront cannabis retail operations in each district.  In order, eligible operators will have the chance to complete their permitting and licensing applications.

Cannabis cultivation is limited in the Carpinteria Valley to a total of 186 acres.  If the cap is achieved and whenever five acres become available, then the same pre-qualification and random selection process would be implemented for cultivation licenses in the Carpinteria Valley area.

More details are available in Section 50-7 of the County Code.

 

Any application for a cannabis business license may be denied based on any of the following criteria:

  • Any grounds for denial listed in Section 22-55, 22-56 or 22-57 of the Santa Barbara County Code;
  • Knowingly, willfully or negligently made a false statement of material fact or omitted a material fact from the application;
  • Any Applicant, owner, person having at least a 20% financial interest, manager, supervisor or employee has been convicted of a felony or other crime as set forth in Business and Professions Code section 26057, as may be amended and was not approved by the Sheriff;
  • Operations, energy conservation, equipment, inventory control, quality control, security waste management or cultivation plans, or other information in the application are determined to be insufficient to maintain the health, safety and general welfare of employees or the public or fail to comply State law or the County Code by staff from the Agricultural Commissioner, Fire, Planning and Development, Public Health or Sheriff's departments;
  • Failure to obtain and/or maintain a valid seller's permit required pursuant to the Revenue and Taxation Code, as may be amended;
  • Proposed cannabis operation does not comply with the provisions of this Chapter 50 or Chapter 50A or State law;
  • Have not received all necessary land use entitlements as required by Chapter 35, Zoning, of the Santa Barbara County Code;
  • Denial a license to engage in commercial cannabis activity by a State licensing authority;
  • Proposal exceeds the limitations or has not complied with the selection process established in Section 50-7 of the County Code;
  • Denial of the County access to the premises to conduct an inspection; or
  • Failure to pay County taxes, license or permitting fees.

Any of the following shall be grounds for suspension or revocation of a cannabis business license, based on substantial evidence and following notice and the procedure in Section 50-27 of the County Code:

  • Failure to comply with one or more of the terms and conditions of the cannabis business license;
  • The cannabis business license was granted on the basis of false material information, written or oral, given unknowingly, willfully or negligently by the applicant;
  • Any act or omission by a licensee in contravention of the provisions of Chapter 50 of the County Code;
  • Any act or omission by a licensee in contravention of State law or the Santa Barbara County Code;
  • Any act or omission by a licensee that results in the suspension or revocation of the applicable land use entitlement/permit issued under Chapter 35, Zoning, of the Santa Barbara County Code for the commercial cannabis activities;
  • Any act or omission by a licensee that results in the denial, revocation or suspension of that licensee's State license;
  • Failure to pay, or engaging in falsely reporting of, State or County taxes on commercial cannabis activity;
  • Any of grounds for revocation listed in Section 22-59 of the Santa Barbara County Code;
  • Failure to meet corrective action plans issued by County Department(s) cited in this Chapter; and
  • Engaging in conduct that constitutes a nuisance, where the licensee has failed to abate the nuisance. 
 

Cannabis Operations Tax

Every person who engages in cannabis operations, including the cultivating, manufacturing, producing, processing, preparing, storing, providing, donating, selling, or distributing cannabis or cannabis products within the unincorporated area of the County shall pay to the County Treasurer-Tax Collector a tax on the gross receipts of each of their operation's activities involving cannabis or cannabis products, whether cultivating, manufacturing, producing, processing, preparing, storing, providing, donating, selling, distributing, or otherwise.
Yes. Personal cultivation and personal use, as defined by County Ordinance 5026, Chapter 50A, Section 50A-12 is exempt from the commercial cannabis business tax.
Yes. Personal cultivation and personal use, as defined by County Ordinance 5026, Chapter 50A, Section 50A-12 is exempt from the commercial cannabis business tax.
  1. Nursery: 1% of gross receipts; and
  2. Distributor (excluding Distributor Transport Only): 1% of gross receipts; and
  3. Manufacturing: 3% of gross receipts; and
  4. Cultivation: 4% of gross receipts; and
  5. Retail: 6% of gross receipts; and
  6. Microbusiness: 6% of gross receipts.

In addition to the above rates, the number of cannabis units or cannabis products sold/transferred must be tracked and reported quarterly by the cannabis operator.

"Gross Receipts," means the total amount actually received or receivable from all sales and transfers; the total amount of compensation actually received or receivable for all the performance of any act or service. "Gross Receipts" subject to the cannabis operations tax shall be that portion of gross receipts relating to business conducted within the unincorporated area of the County.

The County's taxes on cannabis operations shall be paid on transfers between each operation (Nursery, Distributor, Manufacturing, Cultivation, Retail & Microbusiness) regardless of whether the activity is undertaken individually, collectively, or cooperatively, and regardless of whether the activity is for compensation or gratuitous.

For more detailed information please review the definition of "Gross Receipts" in County Ordinance 5026, Chapter 50A, Section 50A-3

Every person/operation shall keep full, true and accurate records as to the amount of cannabis or cannabis products sold and/or transferred for a period of at least 7 years and shall, upon request of the Treasurer-Tax Collector, make all records available. (County Ordinance 5026, Chapter 50A, Section 50A-8.)
The Treasurer-Tax Collector has the power to audit and examine all books and records of persons engaged in cannabis operations. For more detailed information please review County Ordinance 5026, Chapter 50A, Section 50A-8.
July 1, 2018. The first payment is due on October 1, 2018, based on the gross receipts of the business during that quarter and will become delinquent if not paid by October 31, 2018.
The amount of the gross receipts tax shall be due and payable by the first day of January, April, July and October, and shall become delinquent if not remitted to the Treasurer-Tax Collector on or before 5:00 p.m. on the last day of each of those months.
Taxes are payable to Harry E. Hagen, Treasurer-Tax Collector.

Any operation that fails to remit payment by 5pm on the last day of the reporting month will be assessed a 10% delinquency amount on the tax amount.

Any operation that fails to remit payment for past due taxes on or before a period of 30 days following the first delinquency will be assessed a second delinquency amount of 10% on the original tax amount.

In addition to the delinquency amount(s) there is also interest charged on the original tax amount at a rate of 0.5% per month that will be added to the amount owed.

That is tax fraud. If the Treasurer-Tax Collector determines that there is a nonpayment of any remittance due to fraud, a delinquency amount of 25% of the amount of the tax shall be added thereto in addition to the delinquency amounts identified County Ordinance 5026, Chapter 50A, Section 50A-5.
Yes, regardless of the operation's license status with the County, you are required to pay taxes on cannabis operations conducted within the unincorporated area of the County.

Additional Information

View the full County ordinance

This Taxation FAQ does not address any state or federal taxes that may also be applicable.

Treasurer-Tax Collector's Contact Information:

Website: www.sbtaxes.org

Address:

County Administration Building
105 E Anapamu St., Rm 109
Santa Barbara, CA 93101

Phone Number: (805) 568-2920


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