Getting high in Santa Barbara will soon get more expensive.
People who buy their cannabis from one of three retail shops in Santa Barbara will have to pay more in taxes, the City Council decided on Tuesday.
The council voted 5-2 to increase the retail tax from 6% to 8% as a way to generate between $125,000 to $300,000 annually. The tax increase does not apply to medicinal marijuana sales.
Councilmembers Wendy Santamaria and Eric Friedman opposed the tax increase, raising concerns about the impact on the cannabis industry. Mayor Randy Rowse and councilmembers Meagan Harmon, Mike Jordan, Oscar Gutierrez and Kristen Sneddon supported the increase.
Councilwoman Harmon originally suggested taxing retail cannabis dispensaries late last year to help increase revenues in the city budget.
She said that non-medical use of cannabis is a luxury item and that she would support even a higher tax than 8%.
“Personally, I think it is too low,” Harmon said. “We owe it to our community to do this. Every dollar counts.”
Harmon said she has “no idea,” how much legal cannabis costs and has never purchased it. On Tuesday prior to the meeting she went into a dispensary to see the costs and do a price-check and said a “pre-roll” costs $5.50 cents.
She said the tax increase would amount to no more than 12 cents.
“That 10-, 11- or even 12-cent increase on what is a luxury recreational item seems to me quite a reasonable policy decision to make,” Harmon said.
Harmon said she could not understand her colleagues’ concern about increasing the cost for cannabis retailers by such a low amount. She noted that the city passed a “regressive,” sales tax increase two years ago, and is now considering a real property transfer tax, with impacts on people citywide. Yet, some of her colleagues were concerned about a targeted tax on a luxury retail item.
“It is very unsettling to me that we would pursue those avenues while not also looking at targeted, highly specific opportunities that don’t have such regressive, broad applications,” Harmon said. “I simply can’t understand it.”
Councilmember Santamaria said she was concerned that increasing the tax on the cannabis retailers would hurt them financially.
“While we need to stabilize our own budget, I don’t know that destabilizing an industry is the answer here,” Santamaria said.
She said she doubts the city will see an increase in sales if the tax rates go up and then that would drive users to buy the drugs illegally.
“I don’t know that this is the right call at this time,” Santamaria said.
Santamaria and councilman Friedman agreed with each other that raising the tax would unfairly hurt the cannabis retailers.
“We’re one of the highest in the state if we do it at 8%,” Friedman said. “Locally we would be the highest. It gets to the point that as costs for everything are going up, consumers will find a way to purchase it at the same or even a reduced price.”
The retail tax is just one tax that consumers pay. Users also pay an excise tax of 15%, and a sales tax of $9.25%, which compounds. In total, there’s about a 40% tax on cannabis products when all is added up.
Cannabis retail taxes have already been on the decline. The city took in about $979,000 in 2025 and expects to bring in about $895,000 in the 2026 fiscal year. With the increase, which goes into effect July 1, the city expects to increase those cannabis retail revenues to $1.1 million.
Councilwoman Kristen Sneddon said she would support an even higher tax rate because of the serious health concerns of highly concentrated, potent cannabis available through dispensaries.
“The corporate growers and the corporate sellers, that’s where the true environmental
Sneddon said she accompanied someone to an emergency room in San Diego who with a vape form of cannabis had a seizure and was hospitalized and the emergency room doctor told her that those types of incidents happen several times a day.
“To me this isn’t about cannabis itself, it is about the corporate growers and the corporate selling of a product that is highly concentrated in forms that could not be achieved with backyard local growing,” Sneddon said. “
