On January 1, 2018, California became the largest marijuana market in the United States. But some farmers in America's most populous state feel like they aren't actually going to have a fighting chance when the market opens.
According to some small and medium-sized growers in California, they have spent the last few years preparing for regulations that would initially not allow farms over 22,000 square feet. But when the final regulations were issued in mid-November, these farmers say they found a technicality that provides an avenue - or a 'loophole,' as some put it - to own any size farm.
Growers can still only purchase a permit for small and medium farms. However, while the owner of a medium farm can only own ONE medium farm permit, there is no such regulation on small farm permits. The state of California confirmed to Circa that there is, in fact, no limit on how many small farm permits are allowed to a single grower, or any regulations on how far away from another small farm each plot must be. Because of these regulatory 'loopholes,' one farmer could purchase one hundred small farm permits and have all the permits plotted alongside each other - creating a much bigger farm.
"For three or four years, California regulations were insistent that smaller farms will be allowed and that larger farms will not be allowed until 2020," said Chris Van Hook, a California-based cannabis industry lawyer and founder of the Clean Green cannabis certification process. "And they just changed that."
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"So really the law is skewed, where if you have unlimited funds you can buy 100, 500, 1000 licenses," explains Mitchell Davis, a grower in the central valley. Davis said he has been in the cannabis industry for ten years, and recently purchased a medium-sized farm to begin growing once legalization was passed. He says the current regulations will create a free-for-all in the burgeoning industry.
"If I can afford to spend the million dollars-a-year on licensing, I can get a million feet of grow," he explained.
According to Davis and Van Hook, this puts undue hardship on the small farm owners, because they can't produce enough to be the sole stockist for a distributor - while other, larger farms can. It also creates a more homogeneous plant DNA pool because only a few strands are grown by only a few large farms, rather than a myriad of small strains grown by a plethora of small farms across the state.
Van Hook said that large farms will end up taking small farms' business, even if quality is better in the smaller cannabis batches. The reason? It's easier for the distributors.
"There’s always a tendency for large distributors to work with large producers," he added. "[Distributors] don’t want to call fifty different farmers, they want to call one place,"
Van Hook is one of a handful of cannabis industry leaders, though, who are trying to come up with ways to combat this new bump in the road. Van Hook's Clean Green Certification - an already-well-known growing certification similar to USDA organics - is organizing a small farm collective, so that they can be that one place distributors call to fill all the orders.
Note: The state of California responded to our request for confirmation of facts present in this article, but by publishing time did not address the accusations of small farmers.
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