You'll have to excuse Humboldt County cannabis farmers if they feel they've been had.
A trio of state agencies released emergency regulations Nov. 16 that will govern the launch of the state's recreational and medical cannabis industries next year, dictating how cannabis products can be grown, manufactured, transported, tested, bought and sold (see NCJ Daily). There is a lot of information packed into the 278 pages but, in the eyes of locals and others who have watched this process closely, there's also a glaring omission. The regulations effectively leave no limit on how big a cannabis farm can be.
While the regulations do limit the sizes of grows depending on the type of license a grower obtains — with a cap of one acre per license — there is no limit to how many licenses a farmer can have, meaning there's apparently nothing to stop a large corporation from going huge and cultivating dozens of acres or more. It's the average Humboldt farmer's nightmare.
And it's a bit baffling how it came down. A cap has long been part of the conversation and generally regarded as a given. While it wasn't written into Proposition 64, it was a talking point used to get buy-in from growers. Previous draft regulations included a 4-acre cap, and a Department of Food and Agriculture environmental impact report released Nov. 13 went further and recommended a 1-acre limit.
But when the same agency released the regulations a few days later, the cap was effectively gone. Questioned on the about-face, department spokesman Steve Lyle told the Santa Rosa Press Democrat that the cap was "left out following evaluation of the emergency regulations, including input from stakeholders, that went on right up until the regulations were finalized."
That sure makes one wonder who those "stakeholders" were but it's a safe bet they weren't small farmers.
The same Department of Food and Agriculture released a study last month estimating that Californians consume about 2.5 million pounds of cannabis annually while the state produces more than five times that amount — some 13.5 million pounds. There is a lot more supply than demand, and farmers going legit and forgoing the more lucrative — and risky — path of taking their harvests across state lines really wanted to see something that held the supply side of the equation in check and, in turn, held cannabis at a workable price point. The market is already totally saturated, with tales of growers struggling to find buyers and sometimes selling at a loss.
California Growers Association Executive Director Hezekiah Allen told the San Francisco Chronicle he thinks the absence of a cap could be catastrophic for the industry, giving deep-pocketed corporations or individuals a clear advantage. This, he said, could create market forces that push growers currently trying to become compliant back into the black market.
"There will be an abundant supply of dirt-cheap cannabis in the state and there is a real possibility that this marketplace could go through a bubble burst collapse," he said.
Last week, the Humboldt County Board of Supervisors voted unanimously to issue temporary permits to the hundreds of growers stuck in the application backlog at the county planning department. The temporary permits will allow those growers to remain in good standing and in line to receive state permits, which are contingent on a grower being in local compliance.
The canary in the coal mine for Allen's theory that the emergency regulations will send growers scurrying back to the black market may be these temporary county permits. If local growers who had been standing in line to become compliant begin backing away from that process, it's a pretty clear sign they believe the state just hopelessly stacked the deck against them. We should know pretty soon.
Thadeus Greenson is the news editor at the Journal. Reach him at 442-1400, extension 321, or email@example.com. Follow him on Twitter @thadeusgreenson.