It’s a raw December day in the heart of California weed country, and thousands of cannabis growers, purveyors and smokers are gathered at the 18th annual Emerald Cup Harvest Ball in Santa Rosa, California.
Moments before, they’d entered the room clad in olive green jackets and navy caps, going around to each of the booths — which were given to 27 grows for free as part of the Cup’s new Small Farms Initiative — and insisted that they put away any actual marijuana on display.
The farmers, most of whom had traveled long distances from rural Northern California to show their weed to buyers, were baffled by the agents’ demands.
But the overwhelming sense amongst the so-called “legacy growers” is that they’re at a breaking point, exhausted by the regulations of the industry that they largely created.
Since the 1960s, cannabis farming has been the economic lifeblood of many Northern California communities, especially those in the counties of Humboldt, Trinity, and Mendocino, collectively known as the Emerald Triangle.
215, farmers came out of the illicit market to grow medical marijuana under relatively modest regulations — for example, each county set a limit to the number of plants a farm could grow.
Worried that the measure would fail without the support of rural farmers, legalization advocates included a provision to encourage legacy growers to join the legal market, promising that no cultivation site would be larger than one acre until 2023.
The CDFA removed the limit on the number of quarter-acre licenses available to individuals or companies, creating a loophole that opened the door to multi-acre farms through bundling or ‘stacking’ licenses.
He is a highly visible, somewhat controversial individual — a charismatic activist who’s known as “the father of legal cannabis” and bills himself as a champion of marijuana accessibility and safety, while also making a healthy profit.
Many of the growers who spoke with Rolling Stone brought up DeAngelo, saying they felt betrayed when he sided with big weed over small farms. Donna Panza’s 10,000 square foot farm in Nevada County was one of many small suppliers for Harborside under Prop.
When asked for comment, DeAngelo said through a representative that he stands by his push for legalization that prioritized affordability for the consumer over protections for small farms: “My primary allegiance has always been to the people who use and need cannabis, which means the product must be safe and tested as well as affordable — a primary objective of Prop 64.” He also says that Harborside never made a decision to stop buying from small growers.
At this point, there are seemingly endless elements contributing to what many in the industry call an extinction-level event for small businesses: a thriving illicit market diverting customers; exorbitant licensing and permitting fees; a lack of access to banking; navigating red tape with county and state agencies like the CDFA.
In January 2018, the California Growers Association filed a lawsuit against the state, claiming that the CDFA loophole “eviscerate the statutory five-year prohibition overwhelmingly approved by California voters.” That spring, State Senator Mike McGuire and Assembly Member Jim Wood held a joint senate hearing that was packed with hundreds of small farmers.
A large, voluble man in his thirties who goes by the name Big Jake, he now runs a nonprofit called MedVets that supplies military veterans with medical cannabis.
He says small farms in Northern California can’t begin to compete with commercial ventures because they don’t have time to stop farming to learn how.
Chiah Rodriques, a second-generation grower and the co-founder of Mendocino’s River Txai Farms with her husband, says that intense regulation is making it near impossible for them to stay afloat as small farmers.
A flat cultivation tax based on weight, rather than market price, is levied before the crop even leaves their farms. In 2021, the tax on a pound of cannabis was $154 — as prices nosedived, that meant the tax rocketed from 10 to 20 percent of the price per pound to as much as 80 percent.
“Over 50 or 60 years, you had families growing,” explains Fred Marshall, who owns a cannabis tincture company called CBD Mendo.
Marshall, who has been growing since 1999, will likely have to shutter his business because his district chose not to allow cannabis grows under an “opt out” clause instituted by Mendocino County.
Moulton unsuccessfully applied to the county planning commission to create a zone to offset the clause; she then tried to relocate her dispensary to the city of Fort Bragg, where she has been repeatedly rejected by the planning commission and city council, despite having support from locals and city staffers.
“I was tenacious because it’s been a passion of mine for years, since back in the days where we used to have to hide from helicopters,” says Jon.
During a call with shareholders, George Allen, chairman of the massive cannabis brand Lowell Farms, called the situation facing California cannabis farmers a “modern-day Grapes of Wrath.” He spoke of learning about the death of a Humboldt grower who, Allen said, “jumped to his death from a four-story building.
Cannabis industry leaders warned Governor Gavin Newsom in an open letter last December that “California’s world-renowned craft cannabis farmers are literally killing themselves, trying to find ways to survive on a chess board that you mandated them to join but is rigged for all to fail.” They warned of the imminent collapse of the cannabis market and called for immediate tax reform, writing, “Our global leadership and legacy is at the brink of disappearing forever.
“I know very few companies in California that are making money,” says Darren Story, founder of a farm management company called Strong Agronomy, noting that he’s had to lay off more than 50 percent of his staff.
“We’re the largest membership-based advocacy organization in the state.” Despite that, Coleman says she received the letter with no time to vet the group’s demands, so she declined to sign.
Instead, Coleman rallied at the state capitol in Sacramento with social equity cannabis operators and legacy farmers on Jan.
After releasing his 2022-23 budget proposal, Newsom simply said, “It is my goal to look at tax policy to stabilize the market.” Details about how he hopes to accomplish that stabilization are unknown.
Owners Hildi Gerhart and Avery Edmunds handle every aspect of farming on two licensed 10,000 square foot parcels of land, and the only place they can save on operating costs is in labor, so they do it all themselves, from seed to harvest, trimming and curing.
Gerhart and Edmunds are somewhat philosophical when it comes to dealing with regulations, and say they’ve been fortunate in their dealings with county and state supervisors.
“The more that we can keep our margins slim allows us to pay attention, to take action, to change.” They are not depressed, they say — in fact, they’re optimistic in the face of the crisis facing small cannabis farmers.