In California’s famed Emerald Triangle marijuana growing region, cannabis farmers by the thousands have stepped out of the shadows to apply for permission to do business in state’s newly regulated marketplace.
The rush of applicants, totaling nearly 3,000 between Humboldt and Mendocino counties, marks the clearest answer yet to the question posed last year before and after the state’s landmark popular vote on recreational use of marijuana: Would growers and others in long-illicit parts of the trade come forward and participate in the new legal marketplace?
So far, at least in the northern parts of Cannabis Country, the signs are encouraging, officials said.
“It is a staggering number,” said Bob Russell, acting deputy director of Humboldt County’s planning and building department. “It is an unprecedented volume of applications for our department and likely for any other department.”
Plenty of issues are cropping up even in that formal process, including complaints of burdensome regulations and cost that growers fear will hobble them at key time, when the competitive field is taking shape.
Still, the Emerald Triangle may already have a head start on operators in Sonoma County, where the stampede of interest has yet to materialize, prompting talk among industry leaders concerned the area’s longtime cannabis producers may be opting out of the newly regulated market, at least for now.
Only 18 potential cannabis cultivation projects have submitted permit applications since they were available July 5, in addition to two manufacturers and a distribution plant, according to county staff.
The slow start has local cannabis advocates concerned a dearth of permitted cultivators could foreshadow a low supply of locally produced cannabis and be an indication farmers are taking a wait-and-see approach, maintaining their black-market sales.
“It’s incredibly low compared to the number of operators we have in Sonoma County,” said Tawnie Logan, board president for the Sonoma County Growers Alliance and a member of the county’s newly created cannabis advisory group. “It’s primarily because there’s no incentive.”
The alliance estimates there are about 5,000 growers in the county.
Big hurdle without incentives
The cost to secure a permit — from permit fees to environmental studies and building improvements — is a formidable hurdle without incentives like grant programs or other funding sources available to emerging industries, Logan said. The basic fee to apply for a permit is between $2,000 and $13,000 not including the upfront costs of upgrades and consultants to meet requirements.
A local permit gives applicants priority when seeking state licenses to operate cannabis businesses, available starting next year. A state license will in theory give cannabis businesses access to a wider marketplace, including sales to dispensaries, and a sense of protection from the federal government, which still considers marijuana an illegal drug.
So far, 651 applications for cultivation have been turned in over the past 2½ months in Mendocino County, where the county has attempted to give so-called “mom and pop” farmers an edge by barring newcomers from the permit process until 2020. The county has granted one license.
In Humboldt County, more than 2,300 entities sought permits for marijuana ventures over an 11-month period ending December 2016, the county’s initial window to apply. The vast majority were for cultivation.
In Sonoma County, 13 applicants came from existing farms or other operations, and the remaining eight are new projects, said Tim Ricard, Sonoma County’s cannabis program manager.