Hundreds of California cannabis cultivators in backlog limbo
Some cannabis growers are already germinating seeds in preparation for the outdoor planting season in Mendocino County, but a backlog in county permits is creating uncertainty about how many of those seeds will flourish into marijuana products sold legally in California.
Over the past 10 months, about 850 people have applied for permission to grow cannabis in the county. Only 100 have so far been approved - 0.01 percent of the estimated 10,000 growers in the county. Legal or not, they are nevertheless central to the region’s economy.
The county has hired a consultant from Southern California, Kelly Overton, and given him the title of cannabis program manager, to oversee an overhaul of its systems for reviewing, rejecting and approving cannabis business applications. Officials have given him a directive: Give more applicants permission to grow.
“We’re really unhappy with the lack of permits being approved,” Mendocino County Executive Officer Carmel Angelo said. “This has been an illegal industry, but for decades, not years but decades, it’s been part of Mendocino County. We’re a cultivating county.”
Mendocino County has been one of the more proactive counties in the state developing programs for bringing cannabis production into the mainstream. Its problems getting cultivators to legitimize their operations are indicative of a statewide challenge: bringing an illegal or loosely organized industry into a tightly controlled system with high upfront costs, a litany of rules and steep taxes.
This week, two California lawmakers proposed a plan to cut the state’s excise tax on cannabis from ?15 percent to 11 percent, arguing the current tax rate was undermining licensed cannabis businesses by driving consumers to buy black-market marijuana.
Mendocino County officials had banked on the county’s cannabis business taxes generating a strong funding stream to fund road maintenance and enforcement, but the program has fallen short. County officials Tuesday said they anticipate tax revenue from cannabis will be? $1.2 million, $500,000 less than expected.
Still, Mendocino County cultivators have the third-highest number of temporary cultivation licenses so far issued from the California Department of Food and Agriculture. As of Thursday, the state had issued 532 licenses in Santa Barbara County, 491 licenses in Humboldt County and 349 in Mendocino County.
These licenses are valid for 120 days, after which applicants must present proof of local approval for the farm. According to state data, cultivators with temporary state licenses come from 25 of 58 California counties.
The slow pace also is stark in Sonoma County, where local authorities have to date given only three applicants permits to grow: the husband-and-wife team behind Fiddler’s Greens near Sebastopol, a planned 10,000-square-foot farm in Penngrove by a local acupuncturist and an indoor cultivation facility near the Charles M. Schulz-Sonoma County Airport.
Fifty-eight Sonoma County growers have received temporary state cultivation licenses while waiting to receive county approval.
Overton started the job as Mendocino County’s new cannabis program manager Feb. 28, arriving from Joshua Tree, where he helped start a small animal welfare nonprofit, Mojave Animal Protection. He was hired in Mendocino County as an at-will, full-time employee with an annual salary of $98,093.
Overton views the county’s low number of permitted cannabis farms as an emergency - a shaky future for communities with hundreds of small businesses trying to survive under regulations for the first time, and a situation requiring urgent response and adaptations.
The county has shaped its rules to favor small-scale farms that can show proof they’ve been in operation on or before Jan. 1, 2016, plus other rules aimed at preventing an influx of outsiders buying up land to plant pot. At stake is the primary economic engine and culture underlying Mendocino County and its communities, he said.
“In Mendocino, do we want a near-term future of shuttered buildings, dollar stores and plasma sites? Or do we want viable communities with sustainable businesses?” Overton said.
Overton said his experience includes working on a contract-basis for government agencies or organizations seeking to improve internal processes, including a stint helping Habitat Humanity retool its model to respond to the unprecedented housing needs created by Hurricane Katrina, which struck New Orleans and the Gulf Coast in 2005.
In addition to examining how the county agriculture and planning departments are working together, Overton said he will initiate improvements to the way the county engages with the public on cannabis topics. That could include upgrading the county’s website for cannabis-related information, providing outreach to cannabis growers in remote areas and creating systems for explaining reasons why a permit application is denied.
California Growers Association executive director Hezekiah Allen called Mendocino County a “leader in the state” for its efforts to regulate cannabis, but the county is still dealing with a strong black market with too few longtime cultivators being legitimized.
“The simple truth we’ve known for many years is that the Emerald Triangle, and in that Mendocino County, has produced far more product than can ever enter the regulated market,” Allen said.
State Sen. Mike McGuire, D-Healdsburg, whose North Coast district spans Marin County to the Oregon border, said at a March 1 meeting in Ukiah with state regulators, including California’s cannabis czar Lori Ajax, that he believes Mendocino County and its Emerald Triangle neighbors, Trinity and Humboldt counties, have historically produced about 60 percent of the marijuana consumed nationwide.
At that meeting, Humboldt County’s planning and building director John Ford described to a crowd of about 250 how he’s brought on 20 staff and six consultants to field upward of 2,300 applications from cannabis businesses, mostly growers. They have so far handed out 360 interim permits and have given full approvals to 160.
In Mendocino County, one of the 349 temporary state cultivation licenses belongs to Mark Shaffer, 38, of Comptche. He received the license last week and it will allow him to sell the remainder of his 2017 crop to another state licensed cannabis business. Sales must occur only between licensed entities, according to new state laws effective Jan. 1. His county permit for a 10,000-square-foot garden is pending and he is focused on winter preparations at his property, maintaining the mother plants he’ll use for clones to plant before the summer solstice, assuming his permit comes through.
“A lot of things are on hold,” Shaffer said.