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In Santa Barbara Battle Between Cannabis and Wine, Grand Jury Reprimands County Supervisors
A battle over wine and cannabis in Santa Barbara County, pitting neighbor against neighbor, is coming to a head. On June 30, a report from a grand jury tasked with monitoring local government issued a scathing report criticizing the county board for its mismanagement of the county's cannabis production.
"The jury believes the Board of Supervisors, in their hubris, failed the people of Santa Barbara County," the report stated. "Now they must amend the cannabis ordinances to regain the people's trust."
Santa Barbara County adopted some of the most lenient regulations for commercial cannabis farming in California and has seen an explosion in production in the past four years—last year, the county was home to 35 percent of the state's licensed cannabis acreage. As a result, locals, particularly vintners, have grappled with cannabis' impact on the area.
In April, a nonprofit made up of more than 200 vintners, farmers and homeowners, dubbed the Santa Barbara Coalition for Responsible Cannabis, filed suit against the county's board of supervisors, citing what the coalition considers a lack of ordinances regulating cannabis production and a faulty licensing program which has allowed farmers to stack licenses and create some of the largest cannabis grows in the state. The suit aims to cut down on the number of unpermitted cannabis farms and stop the board from issuing further permits by challenging the environmental reviews that have led to permit approvals.
"Pursuing legal action is not fun, nor is it a place we wanted to go, but it's necessary," Debra Eagle, a board member for the coalition and general manager for Alma Rosa winery, told Wine Spectator. Eagle felt like the board of supervisors was ignoring its citizens.
The grand jury finding is independent of the lawsuit, which has not gone to court yet. But it affirms the vintners' claims, stating that the board must regain the people's trust by enacting extensive modifications. "We're thrilled that the grand jury substantiated what we believed to be true," said Eagle.
Now the county supervisors are considering tighter regulations. But will it be enough to satisfy residents and help the local wine industry?
Misguided approval?
When California's Proposition 64 passed in 2016, the state let local officials decide how to regulate production and sales with temporary licenses. Santa Barbara County supervisors opted to allow farmers that said they were growing medicinal cannabis to add their name to a registry, which would grandfather them in as legal growers and give them temporary cultivation licenses. The growers did not have to provide any evidence, however. In fact, county supervisors rejected a measure recommended by the planning commission to have staff ask for documentation and research the veracity of the statements.
California's temporary licenses expired at the end of 2019. Cannabis farmers now either have to win land-use permit approval from their respective county governments or apply for a provisional permit to continue growing for another year.
According to Michael Benedict, co-founder of Sanford & Benedict Vineyard, the board of supervisors has been playing fast and loose with land-use laws and issuing permits without proper planning. "Plan first and then issue permits," he said. "The [cannabis] farmers are taking advantage of a loophole, but it's not their fault; the board has enabled this."
"I agree with the critique that the rules for medicinal cannabis were loose," said Das Williams, first district supervisor for the county, noting that they were created before he joined the board in early 2017. He said he was unhappy with how much cannabis was established when he took office but is pleased that the permitting process has begun, and noted that those that don't meet standards will be out of business.
But Williams was one of two supervisors called out by the grand jury, though not by name. He and supervisor Steve Lavagnino were the sole members of an ad-hoc committee that devised the current permitting process. Normally, land-use policy starts with large public meetings and county planning staff, who then make recommendations to the board. But in this case, the grand jury wrote, policy recommendations were hashed out by the ad-hoc committee, which then presented it to the full board.
The Santa Barbara Coalition for Responsible Cannabis points to the initial Environmental Impact Report (EIR) for the Cannabis Land-Use Ordinance and Licensing Program as proof of the flaws in the process.
The supervisors use EIRs as their guide for approvals of any land use application. In February 2018, the board certified the cannabis EIR, despite identifying several environmental impacts of cannabis farms, including effects on agricultural resources, air quality and greenhouse-gas emissions, noise, transportation and traffic, and aesthetic and visual resources, all of which they deemed incapable of being adequately mitigated, and therefore unavoidable. As a result, they adopted a "Statement of Overriding Considerations" to approve the EIR and allow the propagation of cannabis farms throughout Santa Barbara County, despite the impacts.
"Making a Statement of Overriding Considerations is something just about every California jurisdiction does when it does a project," argued Williams, noting that they prevent people from litigating for subjective or spurious reasons. "We have every intention of continuing the fight against odor and peaceful co-existence."
But the grand jury found that during the EIR process, Williams and Lavagnino were working closely with the cannabis industry. "The Board of Supervisors granted nearly unfettered access to cannabis growers and industry lobbyists that was undisclosed to the public during the creation of the cannabis ordinances," the jury wrote. It found that while they listened to cannabis lobbyists, they ignored residents concerned about cannabis growing odors near schools and winery tasting rooms and vintners and avocado farmers who worried about restrictions on pesticide use.
Perhaps the most critical element of cannabis and vineyards sharing land is the potential risk of herbicide or pesticide drift. By law, cannabis may not be commercially sold or used if it tests positive for any inorganic substance. On the flip side, cannabis can release organic compounds called terpenes. The coalition wants research on terpenes to be conducted to determine the potential for wine grapes to absorb and take on the aroma or flavor before any more cannabis grows are planted near vineyards.
The jury questioned why the conflict between traditional agriculture and cannabis grows was omitted in the EIR, stating that it was no secret that conventional agriculture in Santa Barbara County uses insecticides and fungicides.
Impacts
Santa Barbara was not previously known for cannabis, but it has become so in recent years. The county currently has 880 active growing permits. By comparison, Humboldt County, known for its cannabis culture long before legalization, has 1,180. Santa Barbara's concentration of farms has primarily been along the Highway 246 corridor and Santa Rosa Road, which runs parallel.
"Instead of a balanced approach carefully evaluating how the cannabis industry would be compatible, both as to amount of acreage and location, the board simply opened the floodgates," the grand jury report stated.
Blair Pence, proprietor for Pence Ranch, located just off Highway 246, said he's had firsthand experience. Pence said there have been two illegal grows near his 200-acre ranch and vineyard, both of which were busted. In addition to wine grapes, he also grows fruits and vegetables, raises cattle and has an equestrian training facility. Pence said his equestrian clients stopped coming around because they were fearful of the high-level security directly across from his property. "We're not making this stuff up—there are guys toting guns," he said.
Benedict echoed Pence, citing 24-hour surveillance and cannabis farm employees who keep an eye out for both trespassers and inquisitive neighbors snapping photos. Benedict said his presence near a cannabis farm adjacent to the Sanford & Benedict Vineyard led to bullying and fear tactics, including threatening letters after he took photos of the grows from his own property. "Never once have I been threatened in my previous 50 years," he said.
Many, including Benedict and Pence, question why cannabis farms feel they need that level of protection. Pence said he's put up electric gates and alarms on all the houses of his ranch for an added layer of security. "This is how it's changing our neighborhood."
Supervisor Williams said he lives a few blocks away from the biggest cannabis operator (by gross receipts) in the county, but has not seen armed security in his community. "Our local Sheriff's Lt. has been clear that crime has not risen here since legal cannabis came here," he said. "Of the 59 raids we conducted, we've possessed more illegal cannabis in one year than the California Highway Patrol has seized throughout the state. We're not going soft on these guys."
The report recommends that the supervisors require all cannabis growers who have applied for provisional permits, claiming their grows are legal, to prove it. It also calls on the board to suspend all unpermitted cannabis operations until the planning commission accepts proof of odor control. Further, they recommend the county establish an independent ethics oversight commission for the board and its staff, and to direct the county planning and development department director to begin creating new Environmental Impact Reports for each region of the county after holding public hearings to evaluate public concerns, so the EIRs reflect balance between cannabis, traditional agriculture and county residents.
The board has yet to respond publicly. Williams did not respond to a request for comment after the report was released. He and Lavagnino both told local media that they disagree with the report and believe the jury was biased. But on July 14, the board moved to make some adjustments, implementing new restrictions affecting the northern part of the county, including a total ban on commercial cannabis grows in rural neighborhoods, a 50-foot setback from cannabis cultivation areas and that all cannabis processing and drying is to be done in an enclosed building.
Future
One winery trying to bridge the gap between the two industries is Sunstone. The Santa Ynez Valley–based winery is one of a handful of local wineries to have applied for a cannabis cultivation permit. "Look, I'm opposed to massive grows, but if done responsibly and with respect to neighbors, I believe these two crops can be mutually beneficial," said the winery's president, Teddy Cabugos.
Cabugos points to the need for wineries, especially small ones, to diversify and connect with multiple generations, referencing data about younger generations, particularly Millennials, who lack interest in wine. "We're not turning our back on the wine industry," said Cabugos. "But if we can create something new, or connect our cannabis business with a name people are familiar with, we may lose some customers in the process, but we also might gain a lot more."
Cabugos said, if approved, he would go about things very conservatively. "We applied for 8 acres, but we'll start with 2 and then check in with our neighbors before adding more." Sunstone is an organic vineyard, so pesticide is not an issue. Terpenes don't concern Cabugos either. "Lavender and eucalyptus give off more terpenes than cannabis," he said, citing plans to plant cannabis right next to vineyards. He also plans to conduct testing for terpenes in grapes and be a guinea pig to show how the two industries can coexist. To combat odor concerns, he plans to take all of the drying and processing off-site.
The coalition points to the fact that other wine regions throughout California have seemingly found a way to cohabitate and limit cannabis growth to prevent it from becoming intrusive. For example, Sonoma County has limited cannabis cultivation to 1 acre per parcel. To date, 88 growers are farming 88 acres in the county. "We're just asking for Santa Barbara to be in line with what other parts of the state are doing," said Eagle.
The grand jury has given the board 90 days to respond to the report and amend the county's cannabis ordinances to suit the sentiments of its citizens.
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