Marijuana set to change North Bay business

How to regulate the business of cannabis as it emerges from underground operation isn't the only issue facing local communities in California.

As growing and selling marijuana comes into the open, banking with large sums of cash, marijuana odor mitigation, diversified farming, and even growers giving to charity are issues emerging as this enormous industry tries to integrate into the community.

'California is, hands down, the leader in this industry,' said Hezekiah Allen, executive director of California Growers Association. He is Humboldt County born and raised. 'There are 53,000 independent growers with 280,000 employees that are paid an above-average wage. We are already global leaders, with tens of billions of dollars in sales. This is a unique opportunity for a multibillion dollar industry in the hands of individual farmers.'

The 700-member trade association focuses on promoting public policies to foster a sustainable, healthy and legal cannabis industry. He pointed out that cannabis is already a commercially active industry.

Allen was part of a panel discussion at Cannabis Impact was an event Aug. 17 at SOMO Village in Rohnert Park, presented by the Sustainable North Bay Organizing Committee.

Also on the panel was Terry Garrett, co-managing member of Sustaining Technologies and Sonoma County GoLocal Coop. He noted five studies on spending in large local industries: Sonoma County consumers annually consume $50 million in wine, $68 million in beer and an estimated $126 million in cannabis.

Allen said the figure on cannabis spending is likely much higher.

The California Medical Marijuana Regulation and Safety Act, or MMRSA, was passed in October. State and local governments have until 2018 to set up a new comprehensive regulation and licensing scheme for the medical marijuana industry.

Those creating the regulations have a difficult task because cannabis is still illegal at the federal level, and the Drug Enforcement Agency shows no signs of backing down.

Colorado, which has legalized medical and recreational cannabis, is still learning from California, said Boulder Chamber of Commerce President and CEO John Tayer at the event. He encouraged communities not to wait for the state to issue regulations. Rather, he urged local action, then see what happens at the state level and make adjustments later.

'Work with the industry leaders. Have them be at the table for the discussion, not just the lawyers and lawmakers,' he said.

A major challenge in Colorado has been how to handle the banking, when growers mostly deal in cash. Some banks are willing to take the risk, but fear having to disclose information to the federal government.

'Businesses need to have a certainty of safety,' Tayer said. 'That's not easy when it's still seen as illegal at the federal level. Some sophisticated growers have relationships with bankers, and some banks are looking at ways to deal with it, but it's a challenge.'

The federal government said no to a proposed charter credit union for the industry, he said.

Tayer said the amount of tax revenue collected from cannabis in Boulder has not been a panacea. At $8.4 million in 2015 it is still a major benefit, but there needs to be more sophisticated regulation, he said.

As more cannabis businesses are legitimately recognized, communities can also expect more in the way of philanthropy, similar to the generosity expressed by the wine industry. Tayer noted growers in Boulder are sponsoring charity events.

'Cannabis growers need to be welcomed as business leaders. It's something to get very serious about in your community. You're going to see a high caliper of business savvy, with major impacts in the community,' he said.

Also on the panel was Tawnie Logan, executive director of Sonoma County Growers Alliance, which was founded in 2015, in part, for the education of growers on the development of regulations.

'The only way it's going to happen is when people can say, 'I'm proud to be a grower, a bookkeeper, a trucker in the cannabis industry,' she said. 'Sonoma has an opportunity to be a thought leader and set a ripple effect globally.'

In March, the City of Santa Rosa adopted a new ordinance that allows for medical marijuana commercial cultivation in specific industrial zoning districts in the City of Santa Rosa, with a Conditional Use Permit.

There has already been a rush for commercial property, as reported in the Business Journal on May 16. Sonoma County's location on the Highway 101 corridor from major cannabis growing regions in counties to the north makes it a potential hub for distribution, transportation, processing, packaging, and refining, Logan was quoted as saying.

'Sonoma County is set up to be the biggest player in producing the raw product in Northern California. Sacramento would be its eastern cousin, with lot that comes through from Northern California on the east,' she said.

The passage of MMRSA also redefined cannabis cultivation as agriculture. Tony Linegar, Sonoma County Agricultural Commissioner, said the county has the difficult task of striking a balance creating land use policies that won't be too restrictive to growers, and will address issues for neighboring communities.

'It's a very complicated issue. We're honing down what zones, how large, how to deal with odor mitigation and water quality,' he said. 'There are also fertilizer and waste management issues.'

Also with the passage of MMRSA, farmers will be allowed to diversify their crops. In Sonoma, where land is very expensive, 'You've got to sell a lot of zucchini to pay property taxes, and cannabis is a very efficient cash crop,' Linegar said.