As the clock counts down to statewide marijuana regulations, cities and counties across California are working to draft some rules of their own in an effort to maintain local control of the budding industry.
However, with a January 2018 deadline to cement these guidelines, many communities are biding their time, waiting to see what others do in the wake of Proposition 64’s passage.
The City Council is taking a cautious approach to new laws regulating commercial marijuana growing, observing what other states like Colorado and Washington have done and learning more about the industry in general.
A medical marijuana collective, Yolo Botanicals started on Wright’s property with around 400 cannabis plants on a one-acre plot in rural Woodland about two years ago. Since then, the operation that touts the motto “growing health” has grown in scope. More patients have become members of the collective and several existing Yolo County farmers have leased acreage to growers, increasing yields of what members simply call “medicine.”
“We wanted to be completely transparent since day one,” Wright recalled. Early on, Yolo Botanicals reached out to local law enforcement and government officials, shining a light on an industry that often operates in the shadows. Since Prop. 64’s passage, Yolo Botanicals continued to be a resource for Yolo County officials. “We have been instrumental in helping the county write rules and regulations,” he said.
On Tuesday, Wright extended this courtesy to city officials, inviting City Councilmen Tom Stallard, Skip Davies and City Manager Paul Navazio to his home. During a recent council meeting, Davies left the impression he wasn’t in favor of commercial growing or retail sales regardless of what the law will allow. He was insistent that the city not only take its time but look at the overall reasoning for even allowing sales.
“I think we need to be real clear about why we’re in a hurry,” he said, before we go “down this road too fast” and he also said the council needs to ask “How is this good for Woodland?” Wright hoped to answer this question and change Davies’ mind, admitting there was a time when he was “completely against it” as well. Wright emphasized Davies’ interest in learning more signaled significant progress. “How does it improve the community?” Davies asked Tuesday.
Apart from the medicinal applications, Wright, along with West Sacramento Management Group President Cipriano Sulamo, explained that their operation would strive to keep everything from cultivation to distribution local. For example, Yolo Botanicals would like to build a large — somewhere between 200,000 to 350,000 square feet — facility to clean, dry, trim and process the medicine in one place.
At the moment “they don’t allow anything like this in this area,” Sulamo said, noting he has scouted locations in neighboring counties but would prefer to keep everything in Yolo. Testing facilities, however, would remain a third-party entity as regulations dictate. Navazio asked if Yolo Botanicals would stay a medicinal grow after next year, noting that “the line is getting blurrier and blurrier” between medicinal and commercial operations. “You want to stay toward the medicinal side,” Sulamo responded, leading the group around Wright’s grow. The trio continued to ask questions and observe, shaking hands with a handful of workers on site, one-by-one.
According to Sulamo, there are 79 people involved with multiple grows under the collective’s umbrella. West Sacramento Management Group acts as a head for a cooperative of growers; Sulamo handles the logistics, licensure and tax burdens while growers like Wright focus on labor efforts and day-to-day crop management. Future growth of the cooperative would mean more local jobs on many levels. Last month’s Cannabis Job Fair put on by the Yolo Cannabis Coalition provided some evidence of the economic impact of legal recreational cannabis. Lines went out the door of the Davis Odd Fellows Hall, showing the apparent interest in the growing industry. Once deemed completely legal, many medicinal marijuana growers will need employees to man the testing, distribution and marketing of the plant, which currently accounts for a $7 billion industry in California.
Those numbers will only increase with the blessings of county officials like District 2 Supervisor Don Saylor, who arrived at the job fair to say cannabis was “a product here that could make a huge difference in the lives of people.” Sulamo credited such county officials for their efforts in learning about the industry. “John Young, he could almost be called a pioneer,” he said of the longtime agricultural commissioner. “He is on hand with all the growers. He is very proactive and responsive.” “I grow in all kinds of counties,” Sulamo continued, “and I think Yolo is the best one.” Sulamo said that contrary to what many may think, Yolo marks one of the best places on the map for growing because of its willingness and effort to create policy. While that policy often results in more tax costs and red tape for growers, it also ensures a transparent marketing campaign and a promise of a clean product. “People look for products that they know are clean,” Sulamo said. He said he has also managed grows in Humboldt and Trinity counties, which belong to the Emerald Triangle, an area of Northern California famed for top-grade cannabis.
Those counties sport the name, but Yolo’s deeply rooted understanding of agriculture and land use policy has made for a much easier transition to regulated recreational growth. Sulamo and Wright treat their operations much like any farming collective, aiming to maximize output without sacrificing quality. To do so, they employ long-established farming and harvesting practices regarding irrigation, soil treatment and product handling. Marijuana yields significantly more revenue per acre of actual land use, but Sulamo believes Yolo County will for the most part continue to pump out tomatoes, almonds and grapes instead of tearing up acres for pot. “I don’t want to say that cannabis is a sensitive plant; it’s actually very hearty,” Sulamo said, referring to how pot plants require some specific techniques to create good product. “But you get out what you put in.”
Based on their daily grind, Wright and Sulamo appear to be farmers, and not the “lazy hippie” types they said they prefer not to be associated with. Among racks covered in drying plants and crops dotted with the thirsty plant, they speak on irrigation, soil quality and trim process, rarely referring to the plant’s ability to get someone high. Wright said some long-established farmers may adopt a few acres of cannabis for the sake of crop diversity and extra spending money, but as most crops, the farmer will only make a fraction of the money the plant brings in after processing, packaging and distribution. Though tempted by the green of the American dollar the cash crop brings, many wannabe growers will find the industry too difficult to weather, let alone make a real profit. For all intensive purposes, the cannabis industry is no golden goose “This is my job, every day,” Sulamo added, referring to his process of driving from site to site, keeping an eye on all tiers of the process. Such management means many road miles. “I live in my truck,” he said, jokingly.
As mentioned, the amount of money cannabis yields will likely attract many enthusiasts to grab a stake in California. Though Wright said current conditions are “like a gold rush,” the market will eventually take shape and stabilize after competition and regulation weeds out many growers. As with any legal industry, companies will need to rely on size or speciality to survive the competitive squeeze. Sulamo said the almost literal overnight change to legal recreational use will probably simulate the end of the Prohibition Era. Black market operations made good money when alcohol was illegal, but only the largest, smartest, or most specialized alcohol companies could survive the dry spell and subsequent flooding of the market. “Companies will just continue to low-ball one another until someone gives up,” he said, speculating the 2018 flip of the legalization switch.
“Then the market will come back up and prices will level off. That’s how we got the big ones (alcohol companies) like Budweiser.” Wright agreed, saying their collective already has a good handle on the medical side of the industry and has a deep enough pocket to deal with the upcoming instability regarding growers and the policies that will likely trim the industry down to size. As for their product, Wright likened their cannabis quality to a $40-50 bottle of wine. Many growers specialize in extremely effective and specialized cannabis, while others produce bottom-shelf varieties at a bargain price.
He estimated a one-pound bag of their stuff goes for around $1,300 in a flooded market, and likely far more in a dry one. The collective’s warehouse contains thousands of such bags, bringing in a formidable gross income. Sulamo estimates the collective’s first official fiscal year will yield about $25-40 million in revenue, and the company will hopefully be able to keep as much as 50 percent of that money. With taxes and policy to adhere to in the upcoming months, it’s a ballpark figure. Considering upkeep, employment, a single farm can cost the collective up to $700,000 annually. “It’s not like we’re all rolling in the dough,” Sulamo said. “But we’re definitely not losing too much money.”
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