Tuesday, January 17, 2023

Norcal Industry Goes to Pot

 SF Gate, 'Crisis mode': Failing pot farms are killing this California town’s economy

Not long ago, Garberville could have held the title of California’s busiest town without a stoplight. Thousands of tourists filled this small town’s restaurants and bars after spending the day craning their necks at the towering redwood trees of the nearby Avenue of the Giants. And hundreds of cannabis farms in the surrounding hills of Humboldt County brought millions of dollars to the local economy.

But today, the town is on life support. California’s cannabis legalization has killed many of those pot farms, leaving empty storefronts and a cratered Garberville economy in its wake. Overproduction has dropped the wholesale price of cannabis in California by as much as 95%. That’s made pot cheaper for consumers, but it’s also made it impossible for many farms to stay alive.

“The economy here has crashed,” said Laura Lasseter, the director of operations for the Southern Humboldt Business and Visitors Bureau. “... The economy in Southern Humboldt is in crisis mode, and 90% of that crisis mode is because of the cannabis industry.”

Garberville is the most obvious sign of an economic collapse that is reverberating across the surrounding “Emerald Triangle,” a three-county region that includes Humboldt, Mendocino and Trinity counties. For decades, this area was the cannabis-growing capital of the entire country, but now the pot farms are going out of business and bringing down the local economy with them.

So just how did California legalizing pot destroy the industry?

But the same things that made Southern Humboldt County one of the country’s best places to grow pot before legalization are now working against it. After voters legalized recreational cannabis in 2016, the region’s dense forests and long winding dirt roads, which were good for evading law enforcement, became costly expenses when it came to running a legal business.

An annoyance, for sure, but unless the price of gasoline was absolutely heinous, no more. 

 She said the biggest problem for the region’s farmers has been the state government’s allowance of massive pot farms. Originally, California voters approved a legalization plan that limited cannabis farms to only 1 acre for the first five years of legalization. But in 2017, the state created a loophole for companies to infinitely “stack” smaller licenses so they could expand their pot farms to more than a million square feet

The state’s expensive regulations have added even more costs to farming cannabis, which many small farmers are unable to afford. Joshua Sweet, who owns multiple Garberville buildings as well as two pot farms, blamed the cannabis industry’s crash on overregulation. He is currently being sued by the state over an irrigation pond that the state says was built illegally.

So, having pot growing being a felony  wasn't a problem, but having to abide by the same environmental regulations that farmers, ranchers, and everyone everywhere has to abide by was? It's almost enough to make one libertarian!

One of the county’s more controversial actions was placing a cultivation tax on legal farms in 2017 that charged farmers based on their square footage, not the amount of pot that they actually sold. This added tens of thousands of dollars in costs to the small farms. Eventually, the county cut the tax rate by 85% and then suspended the tax entirely last November.

I'm actually surprised they realized they were killing the golden goose.

The pot industry was just getting going when we left Eureka/Arcata back in the early 70s. It flourished for years in the area (and southern Oregon). Georgia's sister Mary, and family lived up in the epicenter near Mad River, CA, where they were teachers, and many of their students parents were pot growers. It's amazing that a few bad policies by local governments can kill off a thriving industry that even Federal law enforcement failed to quell.

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