Mendocino marijuana farmers band together to fight for profits

Some marijuana farmers are fighting back after a crash in wholesale cannabis prices has left them struggling for their financial survival.

Reeling from record-low prices for their crops, 20 farmers in Mendocino County — with help from a Sacramento delivery agent —have banded together in a cooperative effort to sell cannabis to consumers in Sacramento and Butte counties.

The lure is profits, keeping a larger share of the money that would normally go to marijuana dispensaries and delivery services.

Farmer Blaire AuClair hopes the direct program will help nurse her farm back to profitability.

"It's definitely been one of the most challenging periods," she said of the last year.

She and her husband, Daniel, whose family farm is in the tiny community of Covelo, say that the $250 to $300 a pound they receive selling their cannabis to distributors isn't enough to make a profit.

A little more than a year ago they were receiving more than $1,000 a pound on average.

Farmers overall in California increased production after record sales during the first year of the pandemic in 2020. More farmers also went into the cannabis business.

Why prices have fallen

An oversupply of marijuana came at the same time many people saw drops in income with the end of stimulus checks and extended unemployment, say industry observers.

Legal marijuana sales in California last week hit their lowest level since the legalization of cannabis in 2018. The industry observers say the oversupply of cannabis shows no signs of abating.

The AuClairs and the owners of 19 other farms have set up a website called Mendocino Cannabis Shop, promoting their cannabis farms' organic marijuana products and themselves.

The group has also erected a billboard at 16th and T streets. in downtown Sacramento promoting "marijuana with a conscience."

However, under California's state regulatory system for cannabis, farmers can't sell marijuana directly to consumers like produce farmers.

Marijuana sales are allowed only by dispensaries and delivery services, which act in effect as retail operations..

Sacramento delivery service steps up

So, the farmers are using a delivery service to actually distribute the marijuana. The Sacramento-based service, Sovereign, instead of keeping its normal markup, which can be hundreds of dollars on a pound of marijuana, is returning most of it to the farmers.

It charges the farmers a small 10 percent administrative fee off the final retail price consumers pay for the cannabis.

Sovereign owner Brandy Moulton is a Mendocino County farmer herself and also runs a dispensary in Fort Bragg. She said the farmers are her neighbors and she wants to help them prosper again.

"The farmers are facing an existential threat to their livelihood," she said.

The producers who use Moulton's service say they can make triple or more on weed sold through the delivery service.

A small but optimistic start

But the Mendocino direct operation is still in its initial phase, having launched three months ago. So far around $10,000 in sales have been made combined by all the farmers, Moulton said.

One farmer in the program, Chiah Rodriques, has seen around $2,000 of that money.

"It puts the power back in the hands of the farmers," said Rodriques of the program.

She said she kept most of the $2,0000 minus the administrative fee, three times what she would have made without Moulton's service.

Blaire AuClair is optimistic about the program and hopes to sell more marijuana through it.

AuClair said she still plans to grow 500 pounds of marijuana this year, the same amount as in 2021, because reducing output would not give her enough volume to have any chances at a more profitable future.

While the $800 in sales she's made in the first months of the Mendocino Shop Program isn't a fortune, AuClair believes it's a start.

She's betting that she can sell more of the higher profit marijuana to Sacramento County and Butte County residents.

AuClair has farmed cannabis for five years, her husband for eight. She said they take pride in producing small batch marijuana and don't want to stop.

To cut costs, she has turned from local workers to her parents who are working the farm.

"My folks are helping us right now stay afloat," she said. "So we're still sticking with it for another year and trying to make it right."

The Mendocino Cannabis Alliance, the umbrella organization coordinating the farmers' efforts to get more profit for their marijuana, is also talking to other dispensaries and delivery services in other parts of California.

"There are other like-minded people who want more of a return going to cannabis producers," said Michael Katz, executive director of the group.