California Small Farmers Eclipsed

Stephen Andrews
23 Feb 2022

It's no secret that California's legal cannabis market faces a huge crisis. Various elements contribute to the current circumstances, in which, unsurprisingly, those affected the most are small businesses, small farmers, the mom and pop shops. A thriving illicit market that siphons millions from legal retail, coupled with stringent regulations, high taxes, exorbitant licensing and permitting fees, immense scrutiny from county and state agencies, and lack of banking services, is driving small operators to the "verge of extinction." Those most affected are growers who have been actively cultivating cannabis for decades, communities who've unlocked secrets for successful yields, who have to some extent paved the way for others, including big agriculture.

The situation with California's cannabis market is so dire that at the end of 2021, a collective of 29 business executives and activists sent a letter to California Governor Gavin Newsom and governing officials, warning that California's licensed marijuana market is on the brink of collapse if drastic action is not taken soon. 

The letter explains how Proposition 64 has failed to achieve its aims. It says that "an unwillingness to effectively legislate, implement and oversee a functional regulated cannabis industry has brought us to our knees."

California's regulatory environment has created inequality. It has not adequately compensated Black, Brown, and Latina communities for the turmoils of the War on Drugs. It has not provided a safeguard for equity. And it has exposed California's craft cannabis farmers to financial struggles after they were instructed to join the legal theater. 

There are enough dubious regulations that make doing business in California exceptionally hard. There could be an obstacle to just about anything. Even when you go to present your product at an official event. 

Small farms for example, usually don't have retail licenses. The cost for this type of license goes above $100,000 a year. When these farmers want to present their weed at events such as the recently established Emerald Cup's Small Farms Initiative, they may not be permitted to display flower samples at their booths. At least that's what happened last time. Participants were approached by uniformed personnel of the Department of Cannabis Control (DCC) and were asked to direct buyers to a nearby dispensary booth for purchases, according to The Rolling Stone. 

A majority of these farmers had traveled many miles, from remote corners of Northern California, to display their weed at the fair. Only to face a wall with the bureaucratic overreach orchestrated by the DCC. The episode ultimately portrays the malicious system installed in recent years, one that productively erodes California's small enterprises. 

According to The Rolling Stone, Emerald Cup organizers eventually reached a compromise with the DCC. Paperwork was relegated to allow the participants of the Small Farm Initiative to continue to display their flowers. 

The questions that bother everyone here are, why did it have to be like that in the first place? And when is the system going to change? When will the regulative environment evolve to accommodate and comfort all?

california small farmers.

Small Farmers vs. Corporate Cannabis

Since the 1960s, cannabis cultivation has flourished in the counties of Humboldt, Trinity, and Mendocino, also known as the Emerald Triangle. These Northern California communities have relied on cannabis as a primary source of income for quite a while.

Small farmers were provided a measure of protection when the Compassionate Care Act made medical cannabis legal back in 1996. Proposition 215, as the act is also known, allowed farmers to legalize their crops by implementing modest regulations. Each county got a limit to the number of plants per farm. Growers were asked to apply for a license to regulate their legal status and pay taxes. However, it's this very legal landscape that allowed for the rise of the "gray market." 

When Californians voted for Proposition 64 in 2016, they sought to expand regulation to encompass adult-use products. The initial draft of the legislation included provisions that would protect existing growers. A special provision under the new law promised that no cultivation site would be larger than one acre until 2023 in a bid to give small farmers an equal foothold in the legal market before facing off big agriculture. 

However, the California Department of Food and Agriculture (CDFA) amended the provision in question, in November 2017, shortly before Prop. 64 was scheduled to enter effect. The CDFA lifted the limit on the number of quarter-acre licenses available to individuals or companies, which created a legal loophole that enabled businesses to purchase multiple licenses and operate multi-acre farms. 

Of course, big-scale cultivators and industry lobbyists had a role in the entire story, spending large amounts of money in the hundreds of thousands and using cunning strategies to persuade lawmakers to amend the provision. 

It appears the regulation worked well for corporate weed, but it dimmed the light for California's iconic cannabis scene. The lack of protection has also left small operators to compete with a growing number of unlicensed and illegal cannabis dealers next door who undersell them because they do not need to lab test their goods and products for pesticides and fungus or collect the tax on cannabis that a legal enterprise is obliged to do. 

Having said that, it comes down to responsible consumer awareness, which won't solve the problem alone, but it can help. Supporting smaller and autonomous operators and choosing their products over other competitors such as street dealers can help. While it may mean paying a higher price per product, those products are tested for contaminants and volatile solvents, and the weed is grown with much love.

For the authorities who oversee how the cannabis sector is governed, it's another plea to leave behind the interests of one group out of many and calibrate the regulation so that everyone can have equal chances. It hopefully is not too late to act.

Stephen Andrews