California’s Small Cannabis Farmers Are In a Crisis With No End In Sight
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In 2020, California retailers sold an estimated $4.4 billion worth of legal cannabis. From flower and vape pens to edibles, tinctures, and much, much more, the Golden State is selling more weed than any other state and even outpaced its own 2019 sales record by a whopping 57%. But while plenty of money is changing hands in the fully legal green market, the state’s longstanding legacy cannabis growers are struggling to stay above water.
According to a new in-depth dive into the struggles of California cannabis growers from Rolling Stone’s Mary Jane Gibson, the communities and lifestyle responsible for California’s – and thus, the globe’s – famous cannabis quality and culture are in severe jeopardy as the state’s legal framework continues to favor deep-pocketed multi-state operators over small local producers. At the heart of the problem are a perfect storm of high taxes, corporate-friendly politics, and strict regulations that is pushing many growers to the brink.
“There are so many rules,” Chiah Rodriques, a second-generation grower and the co-founder of Mendocino’s River Txai Farms told Rolling Stone. “Every time you turn around, there’s something new you have to do, and another agency that wants a piece of the pie, and there’s no more pie left.”
That legal status was short-lived for many, though, with 2016’s Proposition 64 legalizing recreational cannabis and completely shifting the massive market. Growers were no longer allowed to simply bring their products to dispensary buyers and many small scale growers were priced out of the legal industry altogether thanks to the high cost and strict standards of regulation – not to mention some of the nation’s highest tax rates.
You know how many farmers I know that grow the most amazing cannabis that could not tell you how to put together an actual business plan? To create logos, to set up to go cross-platform for mobile operations… they don’t know these things, and they don’t have the money to stop.” activist Jacob Lawrence, who runs the cannabis nonprofit MedVets, said. “They’ve done nothing but create a breeding ground where it’s actually more enticing to remain where we left off in the legacy market.”
As soon as Prop 64 was implemented, a lobbying effort by multistate cannabis operators eliminated California’s headstart for small farmers, removing a license cap for the state’s one-acre farm limit. The one-acre rule was supposed to benefit legacy farmers, but without a cap on licenses, major corporations have used investor cash to buy up hundreds of licenses at a time, creating massive cultivation sites that dwarf longtime growers.
And while those companies may have a cash reserve that can keep them on dispensary shelves, small farmers don’t have the bank accounts to compete. According to Huckleberry Farms grower John Casali, the price of a pound sold at wholesale has dropped to about $500, but with a flat tax of $161 per pound imposed on cultivators, compounded with other excise fees, profit margins are simply disappearing.
“That includes a $150 trim fee, the cultivation tax, the water board fee, the Fish and Game fee, the county fee and the permitting fee, and that can only happen for a very short period of time before you’re completely out of business,” Casali said.
Casali and other legacy cannabis growers have been lobbying local and state regulators to halt the cannabis tax. Some have found success at the local level, with Humboldt County reducing its cannabis taxes by 85% in 2022, but are still waiting for support at the state level, where Governor Gavin Newsome has said that it is his goal to stabalize the market through tax restructuring. So far though, the Governor has not made any moves to do so.
“Our legacy cannabis farmers are pioneers who deserve to be protected and exalted,” Genine Coleman, founder and executive director of the nonprofit cannabis advocacy organization Origins Council, said. “Without the urgent elimination of the cultivation tax, we will see hundreds of these families abandoning their dreams, closing their farms, selling their land and leaving their beloved communities over this next year.”
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