Decision Time for Marijuana Growers

As California moves towards legalization of marijuana, even for recreational use, longtime growers have a dilemma. A group that is used to operating covertly has some resistance to coming out into the open. On the one hand, they don’t want to miss the potential that legalization will bring, but they worry about revealing information that could be used against them. Case in point is a new offering from Humboldt County.

Humboldt’s Good Standing

Marijuana is the business in Humboldt County. Things have been good for years here as the local economy has ridden the wave of cannabis success. Humboldt officials are fearful that this could vanish with statewide legalization. To get ahead of the curve they are offering a Commercial Cannabis Activity Registry for growers interested in getting permits under new laws just passed. The “grandfathering clause” allows favored status to a cannabis grow in “good standing” by January 1, 2016, for getting a state license.

Humboldt County supervisors see this as a kind of amnesty offering whereby even illegal growers could now argue their farm is in compliance. I spoke to Kym Kemp author of the Redheaded Blackbelt blog and longtime Humboldt resident. “The county seems to be doing the right thing now and trying to protect its tax base into the future,” she said.

Convincing black market growers to sign on is proving difficult. They are quite comfortable with the way things have been going and are concerned with side effects. Will the state and feds come after them for back taxes? So far, “Very few have signed up,” according to Kemp. These operators have survived by staying out of the sight of state and local officials. Can they keep that philosophy going, or will they get left behind?

Kemp seems to think it is worth the gamble to go all in now. Registering will put growers at the front of the line. They have until June to show that they are in compliance. Humboldt Supervisor Estelle Fennel added, “The state will not have regulation until 2018. if you are not in line you will be in the back of the line.”

This is probably a once-in-a-lifetime choice for illegal growers to come out hiding in Humboldt and be part of this now-legal industry. To be sure there will be problems along the way with regulations and guidelines. Forward-thinking growers will realize this is worth the trouble in order to build a legal enterprise that can be scaled, sold, or passed on to heirs.

For Santa Barbara County, in response to the recent marijuana laws enacted in California, which require a county response by March 1, 2016, planner Allen Bell told us his committee is proposing that the county draft an ordinance to prohibit cultivation and delivery of medical marijuana. This will allow the county to maintain local control of the issue and see how it plays out in other parts of the state, said Bell, who is a supervising planner in county Long Range Planning. The proposal goes first to the Montecito Planning Commission on December 16 and then to the County Planning Commission on January 6. It is expected to arrive at the County Board of Supervisors on January 19.

Investing in Cannabis

Anyone who is looking to invest a large amount of money in cannabis would do well to follow the work of Canopy Boulder out of Colorado. This incubator has helped develop some of the most successful cannabis-related businesses. Cofounder Patrick Rea says the industry is still in “the early innings” with only a $2.7 billion legal market thus far. The companies that he helps start do not “touch the plant,” as he put it. Thus they can profit along with the industry’s growth free of the uncertain legislation and regulation.

Rea sees the cannabis industry mirroring the growth of the natural products industry. He mentioned two companies that he thought would do well: Leaf is a smart-phone controlled home-grow system, and BDF Analytics focuses on cannabis-related sales data. Rea has 17 years’ experience with start ups, growth companies, and large corporate entities. His background includes mergers and acquisitions and also venture capital with an emphasis on health, wellness, and self-care.

Fitting Into the Cannabis Industry

The Cannabis Career Institute (CCI) can provide a roadmap for anyone interested in getting into the business. Robert Calkin is the CEO and President of CCI and has spent his life in the cannabis industry. He has been involved in the dispensary business since its inception, and over his 30-plus years he has done just about everything from growing to delivery. He and his partner, Jeff Reidel, offer all-day seminars on a regular basis in a variety of locations throughout the US. Based in Southern California they have events in the Los Angeles area frequently.