UKIAH (KPIX 5) — Marijuana industry leaders say California regulations and fees are crushing the cash business, threatening to drive small recreational pot farmers out of business.
But the state may be willing to help some of those troubled farmers.
At a state senate committee hearing held in Ukiah this week, men and women from across Northern California trying to make a go of the new green economy lined up to wave red flags
“The law of unintended consequences has run amok in this industry, and these are the victims,” said one speaker.
“The regulations and fees they continue to keep slapping us with are not fair, and will most likely force most of this thriving community to disappear,” explained another.
As the night went on, it became increasingly clear even those within the government have concerns.
“If the goal was to create a workable regulatory pathway for existing cultivators to become legal, I think we failed,” said Sonoma County Agricultural Commissioner Tony Linegar.
When asked if “collapse of the industry” was a fair phrase to use, Hezekiah Allen of California Growers Association responded in the affirmative.
“I think we are on the verge of a crisis, absolutely,” said Allen. “We could see some very, very grave outcomes if we don’t correct course.”
“The whole supply chain is starting to collapse,” agreed Brandon Wheeler of Blazing Oaks Homestead Cannabis. “People are going out of business. People are selling homes and farms. I don’t think it’s an understatement.”
A major part of the problem facing small growers is the schedule of payment the state is expecting.
“The regulatory costs spread over five years? Probably not going to crush businesses,” said Allen. “Due all at once on day one? Crushing businesses as we speak.”
The financial constraints have already forces some out of business.
“I sold my farm yesterday. I didn’t want to. I love this plant, I love this medicine,” said one farmer. “But the over regulation has stopped me from moving forward.”
But now the state is responding.
More than a half dozen agencies were on hand at the Ukiah committee meeting to answer questions from the frustrated and confused.
That potpourri of state government of speaks to the challenges these growers are facing. California’s weed czar admits that things need fixing.
“We’re seeing that some of our regulations don’t work for the industry, and so it’s really listening, learning and trying to make some of these changes,” said Chief of the Bureau of Cannabis Control Lori Ajax.
Among the potential changes suggested during the meeting?
One was a production-based tax incentive for growers similar to what is used for alcohol companies, where smaller producers are able to get a tax break for the first x amount of product that they move off of their farm.
But the real consensus was that whatever changes happen need to happen quickly to keep the small recreational pot farmers from disappearing.
“Give us a chance to keep the legacy of Mendocino County sustainable. Please help,” said one of the meeting attendees.