California Scheming
The Tangled Landscape of California Cannabis Regulations
by Jim Roberts
As the long shadows of fall arrive, farmers throughout the North Coast prepare for another harvest full of anticipation, excitement, and the usual anxiety of bringing in the bounty. Our small farm sits on a ridge with a vine-covered stone house that has sweeping views of the fertile Anderson Valley, encompassing old growth redwood forests and rolling hills patch-worked with vineyards. Nothing could feel more idyllic, as our postage-stamp plot of 160 cannabis plants ripens in the honey-hued golden hour of autumn. Nothing could also feel so precarious, as we help launch new political campaigns that advocate for a fair playing field, resources for equity operators, access to banking and capital, and sensible policy, not to mention respect from our neighbors as well as our community and state leaders.
As part of the LGBTQ community, I know the fight all too well. The marginalized and the stigmatized are the scapegoat for all of society’s ills. I watched a whole community die without resources, support, or compassion during the AIDS crisis. Then there were those years of CAMP raids—“Campaign Against Marijuana Planting”—that terrorized communities, putting them under military-style assault by our government’s war on drugs. Decades later, it can only be expected that a trauma response would be triggered as I watch the systematic culling of small family farms, which were promised a leg up with the passing of Proposition 64. You dare not ask what can happen next after your insurance company drops you, your bank threatens to call the loans of your other business, and legislation moves past state lawmakers to the Governor’s desk that could completely shut you down. All for a plant that has been cultivated for thousands of years for medicinal, spiritual, and recreational use.
Seven years after the end of cannabis prohibition, the environment could not be more challenging, especially for our small cannabis farms in our legacy growing region. Proposition 64 laid a roadmap to bring into the fold hundreds of small heritage farms, which were then operating under Proposition 215, better known as the Compassionate Use Act of 1996, a California law permitting the use of medical cannabis. This is what 57% of our state residents voted for, with the intention to create a five-year grace period that would allow only farms that were one acre or under to be licensed by the state.
The five-year head start for small farmers was a concession specifically designed to win support from—or at least quell some of the opposition by—growers in Northern California’s Emerald Triangle, who worried that well-funded corporate cannabis interests would crush them right out of the gate. The delay mechanism in Prop 64 would give them time to get licensed under the new state regulatory regime and carve a toehold in the new legal marketplace for recreational pot.
Unfortunately, at the 11th hour, lobbyists for the most well-resourced cannabis start-ups like Steven DeAngelo’s FLRish, Inc and Grupo Flor, based in Salinas, were pushing on lawmakers. They are thought to be some of the force that influenced the change of rules put out by the California Food and Agriculture Department—rules that would open the playing field immediately for large scale industrial grows of cannabis. Looking back through articles and interviews at that time, all the predicted fears came true years later, when an over-production of flower by a multimillion dollar investment machine forced a collapse in the emerging market. That collapse ruined the future of families in our communities, forced farmers to sell their property, and created an oligopoly where the most powerful and well resourced could push the market into any direction they willed, driving out competition and crushing the little guy.
At the same time, local politics and lobbying here in Mendocino County were stacking up with a drama of their own, slowly building up to another extinction event for small legacy farmers—who were jumping through all the hoops to conform to the new regulations set forth in Prop 64. With large-scale production underway in counties such as Monterey and Santa Barbara, a few home-grown local cannabis brands such as Flow Canna and Henry’s, now backed with rounds of outside investment funding, wanted an on-ramp to compete with some of the biggest players in the state. Carrying the weight of the Mendocino region branding with them, the stakes were high. Historic growing regions in the Emerald Triangle garner international recognition, not to mention historical significance in California’s cannabis culture.
Lobbyists for these companies now had the ear of key local government leaders, convincing them that the only tenable format was large-scale cultivation. To further exacerbate the situation, those forces had an ally running the local cannabis department, who also was a strong proponent of industrial cannabis agriculture. With these power plays in motion, the applications and paperwork of hundreds of small family farms were all but ignored, let alone processed for permits. Our file—even after rounds of submitting duplicate paperwork and constant follow up—sat untouched for almost seven years. Fewer than six sun-grown cultivation applicants/ permits out of 1300+ in our county had made their way to an annual license, the lowest success rate in the state.
With a tenfold growth expansion in play by local government leadership, communities finally started to rally, with a gathering of signatures and a punitive referendum in the making to shut those expansion plans down. Little did we know that shortly afterwards, the California market would completely collapse, taking out over 54% of the market value of the largest players in Salinas alone. Unfortunately, valuable time has been wasted, pushing out local farmers, complicating an already difficult process, and creating unprecedented stresses on the greater local economy. It’s hard to find a restaurant, grocery store, or shop owner that isn’t wringing their hands as local dollars have completely vanished. Some may try to box the troubles within the cannabis community alone, but in reality the grave economic fallout cannot be contained.
Whether we like it or not, our communities have been sustained for decades by the money generated from the weed industry, traditional and legal. Michael Katz, Director of the non-profit Mendocino Cannabis Alliance, states, “County sales taxes are down over 5% throughout the county, most markedly in the Ag and Gardening sectors where the most recent year-to-year decrease was over 42%. When our local cannabis community is thriving, the dollars they generate stay within the community and contribute significantly to our local economy, both through purchases at local businesses and by infusing the county coffers with significant tax and fee revenues.” He adds, “Since the inception of the program, local cannabis taxes have generated over $20 million for the county, nearly $8 million more than projected. The harder it gets to operate a small cannabis business in this environment, the more of these businesses we will lose, all to the detriment of the entire community.”
As we examine the series of events that has brought us to this place, it is equally important to take stock of where we are now and the possibilities of what lies ahead. Thanks to an intervention from the state and a new commitment from local leadership, the Mendocino County Cannabis Program is finally operating in a positive and productive manner. State financial assistance has allowed for additional resources, as well as consultants, to work through the backlog of cultivation sites which already have provisional state licensing. For those local small farms and brands that are still in business, the future remains precarious, but our infrastructure, talent, and idyllic growing region can carry us through to a new chapter in what is projected to be a $5.4 billion annual sales market by 2030 in California alone.
It is now becoming obvious that a true craft model of small production is not only viable, but will be in demand for the years ahead. We have noticed this with our Bohemian Chemist brand over the past few years, as we market to and develop relationships with retail partners across the state. The industry has become far more educated about sungrown cannabis—with its minimal carbon footprint—as well as the quality of flower that comes from a farm with sustainable growing practices.
Cannabis enthusiasts are also very interested in the history of California consumption culture. The state has even awarded a large grant to study the North Coast growing regions, and specifically the legacy story. The grant is tied to Cal Poly Humboldt’s Cannabis Studies Program, with the goal of preserving the history, value, and diversity of California’s rural legacy cannabis genetics and the communities that steward them.
A primary lead in this work is Genine Coleman of the non-profit Origins Council, who represents over 800 family farms across Northern California, most of which are cultivating 1/2 acre or less of cannabis. “For me, this study is about cultural preservation, and healing our communities from the impacts of the War on Drugs through quantifying and honoring the tremendous agricultural contributions California legacy cannabis has offered, and will continue to offer the world,” says Coleman.
In addition to her work in preserving and protecting legacy culture and communities, Genine is one of the main architects of California’s Senate Bill 67, which ratified appellations of origin for cannabis cultivation in the state. This is the first program of its type, and cannabis is the only crop outside of grapes to have a program that is based on terroir. The program has gone through several rounds of development and is scheduled to start accepting petitions in early 2024. In essence, once a petition for an appellation is submitted and accepted, only cannabis within that region which adheres to the specific guidelines set forth in that petition will be able to use the appellation name with its branding and labeling. This was another strong motivation of well-resourced outside corporate interests to gain a foothold in established international growing regions such as Mendocino and Humboldt counties. Thankfully, with the halting of large-scale expansion in Mendocino County, this control remains in the hands of our local family cultivators and the communities they live in.
Coleman states, “The existing legacy farms that have entered legalization, working towards compliance and business viability against all odds, deserve everyone’s deepest respect. To do anything but support these families—and the vast majority of legacy cannabis are family-owned and -operated businesses—is unethical and foolish.”
Coleman continues, “California is home to a wealth of incredible talent, genetics, and innovation when it comes to craft cannabis. Immediate direct-to-consumer marketing and sales opportunities are urgently needed if we are to preserve our existing craft producers, genetics, and products, much less grow the sector.”
Following a similar trajectory that the budding California wine industry tracked five decades ago, there is a host of auxiliary support industries that come along with the emerging craft category. Cannabis tourism is only just beginning to take shape, as enthusiasts want to plan their travel holidays with weed in mind. Our Madrones and Brambles properties in Anderson Valley have joined outfits like the Plant Shop in Ukiah and Sol de Mendocino in Mendocino Village to cater to cannabis tourism by featuring local products, producing events, educational workshops, farmers markets, and more to increase local visitors.
This year, Visit Mendocino County (VMC), the county’s local tourism arm, fully embraced this new travel sector, and their commitment supports local, Mendocino-grown brands. VMC has set out to make our region the leader in the state when it comes to cannabis tourism, and in so doing, has enlisted the services of Brian Applegarth, who runs a travel consulting firm and was the founder of the Cannabis Travel Association International. Applegarth compiles available data, metrics, and studies, and he likes to point out that 37% of active leisure travelers want to participate in at least one cannabis-related activity while on vacation. Keeping in mind that this segment of travelers also enjoys wine, hiking and the outdoors, and memorable dining experiences, it is easy to imagine how the whole ecosystem of the local economy could benefit.
So as the long harvest continues and we bring in this year’s flower, I feel hopeful despite the precarious road ahead. As a family, we have to take stock and find gratitude. We can continue to grow the same crop that my mom did well into her 80s. The farm continues to evolve, as we are now working with scientists and MDs to study our breeding work, seeking cultivars that possess rare and complex cannabinoid profiles that can offer therapeutic benefits. We are also doing preservation work to keep heirloom and landrace genetics available in a fickle market where they are quickly being lost.
In this daily work of ours, the outside pressures can seem insurmountable. But to weather the difficult times, we have decided to latch on to something that fosters excitement and meaning, whether it is developing a new cultivar, supporting local farmers, or finding ways to connect and lift up the greater community we all live in.
Jim Roberts is a second generation legacy cannabis farmer in Mendocino County. He is an owner of The Bohemian Chemist brand as well as The Madrones and The Brambles in Anderson Valley. Roberts is on the Board of Directors of West Business Development Center and one of CalOSBA’s 34 Entrepreneur and Economic Mobility Task Force members.