Will the Emerald Triangle’s small growers survive legalization? It’s the question on everyone’s mind in regard to California’s impending cannabis legalization. And what about the impact of the wildfires that are ravaging Northern California?
Fire on the Mountain
As of yesterday, the wildfires devastating Northern California have reached a death toll of 40. The flames have wreaked havoc, destroyed homes and are also taking their toll on this year’s cannabis harvest. It’s a critical situation for everyone in Northern California.
In regard to the damaged and destroyed cannabis farms, the wildfires could significantly impact the statewide legalization of weed in January. Specifically, the quality and quantity of this year’s harvest.
According to Hezekiah Allen, executive director of the California Growers Association, at least seven cannabis farms have been destroyed. He expects the number to “increase significantly” as people return to their homes.
If the fires destroy a significant amount of the harvest, the prices could skyrocket—just when they are expected to plummet further as legalization takes effect. Ironically, the wildfires could potentially cushion the transition to legalization. For the Emerald Triangle’s small growers, at least.
Among them, a common worry is being priced off the market by major players entering the industry, with the capital to exploit economies of scale.
The Emerald Triangle Growers
Stett Holbrook grapples with the price of weed in his article titled, “The High Price of Cheap Weed.” Holbrook writes that California’s legal medical marijuana business generated $1.8 billion in revenue last year. Meanwhile, the state’s illicit markets pulled in a staggering $5.1 billion. Once legal recreational cannabis hits the market, its value could hit $5.8 billion in the next four years.
But Holbrook notes the reluctance of many outlaw growers to legalize their crops by registering with the authorities.
So far, only about 3,000 of the estimated 50,000 cultivators in the Triangle have applied for permits. For reference, experts define the Emerald Triangle as Humboldt, Mendocino and Trinity counties.
“For some operators,” Holbrook writes, “the cost of legalization–tens of thousands of dollars for even a modest-sized operation, not including attorney and consultant fees—is simply too high.”
There is also the threat of competition from the south.
Well-capitalized operators are planting cannabis in giant greenhouses in the traditional agricultural heartlands of the Central Valley and Monterey County’s Salinas Valley. They have a price point of about $1,300 a pound. Just a few years ago, Emerald Triangle growers could get more than triple that.
Given this, how will the Emerald Triangle’s small growers survive legalization?
At a California Bureau of Medical Cannabis Regulation, Humboldt State University agriculture expert Fred Krissman weighed in. As an example of how industrial cannabis could affect Emerald growers, Krissman pointed to Harborside. This Oakland-based dispensary is developing a 47-acre farm with 360,000 square feet of greenhouses in the Salinas Valley.
Final Hit: Will The Emerald Triangle’s Small Growers Survive Legalization?
To help protect the Triangle’s traditional growers, Krissman calls for limiting farms to one acre, as well as imposing a government-subsidized floor price of $1,000 per pound at the farm gate. But he recognizes such ideas have little chance of success in the current loose regulatory climate.
Some protectionist measures are being taken—but not on behalf of the north country’s small growers. To protect Salinas Valley’s existing $5 billion traditional agricultural sectors, Monterey County officials have restricted cannabis cultivation to existing greenhouses. This move has sparked a real estate frenzy for ramshackle greenhouses that used to produce flowers before “free trade” opened the door to cheaper Colombian imports in the 1990s.
The specter of “corporate cannabis” was part of what led to the defeat of the 2010 legalization initiative in California. At least keeping a market niche for the small producers will now be a challenge for growers, advocates and policy-makers alike.