and Here’s Why

More Than Legal ...Essential

By Peter Dugré

In March of this year, amid a whirlwind of rulings that became the State of California’s shelter-in-place order, decision makers made a calculation of historic proportions. Cannabis was designated an essential industry. With safety protocols and strict precautions, the industry could continue to operate, marking a milestone on the plant’s long road to legitimacy.

“It was a big moment for legal cannabis,” said Tristan Strauss, CEO of Headwaters and President of CARP Growers, the farmers group in Carpinteria Valley. “California was the national frontrunner in legalizing medical cannabis in 1996, so this step not only further legitimized cannabis as an essential medicine but as an essential agricultural commodity on par with so many other crops grown throughout the state.”

It was also a lifesaver for the nascent industry that still sits on precarious footing next to a long established black market. On the side of tax collection for local and state governments, the essential designation kept cannabis tax revenue streaming when many traditional sources of tax revenue dried up with the shuttered economy.

Retail cannabis saw an early boom during the pandemic as both patients and recreational users sought to stock up amid the uncertainty that then tainted every aspect of life (recall the toilet paper shortage!). Initially, retailers saw record sales, and in the months that followed, sales showed steady gains over 2019 levels.

“COVID has introduced the benefits of cannabis to a whole new customer. We’ve seen the rise of the ‘Tincture on Tuesday’ customers, those looking for help with sleep, calming relief and anxiety,” said Graham Farrar, founder of The Farmacy of Santa Barbara, who points to new stresses in a pandemicstricken world as motivation for those seeking the calming qualities of cannabis. “The ‘Fun on Friday’ customers haven’t left, so the combination of the two has increased the number of cannabis consumers to new levels.”

In May of this year, Santa Barbara County Supervisors — ever in debate about the county’s cannabis cultivation program — highlighted the stability of its new cannabis cultivation tax, which was created by voters in 2018. At about $10 million annually and climbing, local cannabis tax revenues allowed the retention of frontline workers when other counties could not afford the luxury and were making drastic budget cuts. The county’s 2020-21 budget projects that cannabis taxes will backfill $7 million in revenue losses caused by COVID-19.

“Farmers supported paying a county-level tax, but in the pandemic and with the essential designation, we saw cannabis taxes reach a whole new level of importance,” Strauss said. “Without this completely new tax, the county would be in fiscal crisis.”

Peter Dugré is co-owner of Two Trumpets Communications and consults with CARP Growers, the cannabis farmers association in Carpinteria Valley. Peter & partner Lea Boyd manage both internal communications and public outreach for associations, public agencies and charitable organizations.