Lake County carves out a niche as Northern California cannabis mecca despite challenges

Ray and Patty Lanier are veterans of the cannabis business. The two met in 2009 at Oaksterdam University in Oakland, the first so-called cannabis college for those wanting to learn more about weed from its history, cultivation and manufacturing.

The two, however, longed for a simpler life to raise their children and still continue within the industry. They set their sights on a location within a 100-mile radius of the Bay Area, and in 2012, landed upon some small acreage in Lake County, near the town of Lower Lake.

The entrepreneurial couple grew their plants under the old medical marijuana laws of Proposition 215 and then transitioned into the new regulated market with the 2016 passage of Proposition 64, which allowed for adult recreational use within California.

Their farm, Noble Gardens, takes up a small space on their 45-acre property and is promoted as “premium, sun-grown craft cannabis” surrounded among old-growth forests. The Laniers were one of the first to apply for a license within Lake County under Proposition 64, and they grow from a 5,000-square-foot garden from their perch about 2,300 feet in elevation.

The farm allows them to produce as much as 1,000 pounds of flower annually.

“We saw our first property and it was super, super cheap … and we bought,” said Ray Lanier, who grew up in Atlanta and has become an expert on permaculture and growing such items as oyster mushrooms.

Patty Lanier also noted the friendliness of the local population and the natural beauty of the region with the mountains surrounded by the 68-square miles of Clear Lake. The two became quickly sold on the area known for tourism and agriculture with a population of almost 70,000.

‘“That is what sold us on Lake County. It was driving around and meeting the people, going into restaurants. Everyone is small business here. I was flabbergasted,” she said.

The Laniers are one example of many who have turned this rural county into a unique success story in the California cannabis industry, which is still struggling more than five years after passage of Proposition 64.

The central complaints are relatively high taxes for growers; a lack of dispensaries in many areas; and recalcitrance among local governments of implementing policies that would allow such businesses to thrive. That has resulted in a still-thriving black market that Proposition 64 was intended to stomp out of business and force everyone to become legal.

To be sure, the Lake County cannabis industry still has challenges as all growers across the state have struggled with a wholesale price drop of more than 50% because of oversupply and competition from out-of-state black market weed.

Some local growers will leave the business or may go fallow next year to wait for the market to rebound. Illegal grows still exist in Lake County, and there also has been a lack of licensed dispensaries beyond three around the city of Clear Lake. However, one new retailer just opened in Lakeport.

But Lake County also has showed the potential of the promise of Proposition 64 to turn the long-stigmatized plant into a legal crop that eventually could rival the wine industry in terms of culture, economic impact, tourism and influence.

That is especially true as Lake County has 226 acres of licensed cannabis cultivation with about 100 operators, according to Supervisor Bruno Sabatier. By contrast, Sonoma County has only about 40 acres licensed for cannabis cultivation as of last year, even though its population is about seven times greater than Lake County.

“Lots of people from Humboldt are over here now,” Richard Derum said of the county that is the heart of the famed Emerald Triangle region and regarded as the home of the most coveted marijuana in the country.

Derum is a longtime cannabis grower near Lower Lake with a 27,000-square-foot canopy. He also serves as a consultant and real estate broker for those looking to enter the industry.

Derum echoed the Laniers; claim that Lake County has a distinct advantage because land prices are much cheaper than in other areas of Northern California.

“They realized they could do it cheaper here, better here and buy land cheaper,” he said of buyers.

Derum has worked with small buyers, larger cannabis companies and even foreign investors on deals over the past three years -- and all of his clients have been outside of Lake County.

Another key factor is that Lake County has a cannabis ordinance viewed as much easier to start cultivation than surrounding counties, which have greater barriers of entry.

“The local government there realized that they really needed it and it could bring in revenue,” said Lauren Mendelsohn, a Sebastopol attorney who works with cannabis businesses across the state.

“A lot more people are moving there and are talking about Lake County now, so in that regard it seemed to work quite well for the county.”

The county made a few key decisions to spur such investments, Sabatier said.

It set up a system to allow cannabis growers to get an initial permit to plant if the applicant was in the process of adhering to standards under the California Environmental Quality Act ― a law that typically results in long delays in awaiting final approval.

“As long as we decided that there was not going to be a significant impact to the environment, we would go ahead and provide you a temporary permit to go and start cultivation,” he said.

The board in 2019 also allowed for larger and more centralized cultivation, giving the OK for applicants to stack their parcels together under one central canopy and permitting for more than 1 acre for cannabis farming, Sabatier said.

That move enticed bigger cannabis companies, such as CannaCraft of Santa Rosa and Flow Cannabis Co. of Mendocino County, that are more vertically integrated from seed to sale.

“It allowed for a more efficient farming option by doing it that way,” Sabatier said. “We probably have some of the largest grows in the state of California.”

The stacking will not be allowed for new projects beginning this year, he added.

Other nearby counties have been less flexible. For example, Sonoma County has struggled to update its ordinance amid protest from neighborhood groups and extended a moratorium on so-called multi-tenant use permits to Sept. 10, 2023, in a move designed to curtail large grows.

In Napa County, the industry has not taken off because of opposition from its powerful wine industry.

Even Mendocino County, which is part of the Emerald Triangle, has had trouble in modifying its cannabis cultivation ordinance to allow larger farms beyond a 10,000-square-foot growing area.

That action stalled amid opposition from environmental activists and some communities already angered with the prevalence of illegal grows.

“A lot of people locally are just fed up with the cannabis industry. They just hate it. There are so many outlaws,” said Mendocino County Supervisor Glenn McGourty.

Such bureaucratic infighting has allowed more investment into Lake County, which is slated to get $13 million in cultivation taxes for the past year, Sabatier said.

The influx also has helped bolster the reputation of the high quality of the marijuana grown in the county. Farmers note the benefits from longer sun exposure than those in more coastal areas.

“The coastal fog creates powdery mildew,” Derum said. “The problem with powdery mildew is that it doesn’t stop in your field. You can take it in your dry room (where moisture is extracted from the buds) and have it blow up in your dry room and destroy your crop.”

Lake County also features high winds that Derum contends helps provide beneficial stress upon the cannabis plants. The Laniers agree the county’s location bolsters the weed crop, noting that sun-grown cannabis is winning over more converts for its aromatic qualities.

“We just cared about the end quality of the product and spending the money that was necessary to create the best product,” Patty Lanier said.

But it’s not easy. She noted it is much harder with larger companies entering the area because they bring a level of efficiency that the couple can’t afford. That has resulted in the plant becoming more of a commodity.

Still, the couple have a strategy: They are planning to focus on the best quality to attract a top price just like their neighbors in the North Coast wine-grape business.

“What people don’t realize is that we’re super tough. We have been farming really for a long time too. You come up with ways to make a tomato at $3 a pound,” she said.

“And you think of ways to do that and cannabis has an avenue for that.”

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com.