How Legalization Is Already Hurting California’s Small Pot Farmers

Photo Credit: Jim Wilson

Brian Chaplin was dining in town when he received a text from one of his pot trimmers: “We just got f*cking robbed 911.” Chaplin shoveled down one final bite of his apple crisp and rushed back to the small cottage homestead – a few chicken coops, a vegetable garden, a rustic house and a 2,500-square foot cannabis greenhouse – nestled among silver oaks and Jeffrey pines in the rolling hills of Grass Valley, California.

Several men in tactical gear, posing as authorities and armed with rifles, had ambushed the property, Chaplin tells Rolling Stone. The trimmer told him that the robbers pointed an AR15 at one of the trimmers and asked him to get down on the ground. Then they blindfolded and tied up four employees, he adds, and stole a $10,000 GreenBroz trim machine and nearly 100 pounds of bud.

As founder of Medicine Box, an organic small-batch cannabis brand, Chaplin had been growing the majority of this crop for the Caladrius Network, which provides free medical marijuana to catastrophically ill children.

Of course, Chaplin immediately called the cops. “That’s what any normal person would do when their home gets invaded,” he says. “I have nothing to hide.” But when the real sheriffs finished investigating the crime scene after the robbery, they sent back a narcotics task force with a search warrant. “That’s when the double f*ck happened,” Chaplin says. They cleaned out the greenhouse and the remaining bud in the drying room. A search warrant is simply “good police work,” says Lieutenant Rob Bringolf with the Nevada County Sheriff’s Office — it serves to protect evidence that could be included in an investigation. “We have a home invasion robbery and what looked like a criminal marijuana operation,” says Bringolf. “We’re better off getting a search warrant so we don’t lose any evidence.”

Legality is more nuanced than it may seem in a state that legalized weed. And California’s mom-and-pop growers like Chaplin are up against a confluence of factors pushing them out of the industry: federal prohibition increasingly backed by Attorney General Jeff Sessions, conflicting state and local regulations, big business competition, black market competition and a tricky relationship to the law enforcement they need for protection.

Since California passed Proposition 64 in November 2016, legalizing cannabis for adults 21 and older, policymakers have struggled through the unwieldy process of crafting regulations for the new adult use and medical cannabis market, which launched on January 1st. Late last November, they released emergency regulations, offering cannabis businesses temporary licensing until the regulations are worked out.

However, in order to get a state license, generally a cannabis business must first obtain a local license. The state officially has hundreds of localities, but not every one will set up cannabis regulations; in fact, a handful don’t want legal canna-businesses altogether. Like thousands of other cannabis cultivators, Chaplin lives where local law currently undercuts Prop 64’s intentions to create a statewide legal cannabis market.

Grass Valley occupies the western region of Nevada County, home to some 10,000 cannabis farms. In June 2016, voters defeated a complete ban on cultivation. But what they got was hardly better: a 12-plant cap for land parcels between five and 10 acres. “You might as well say there’s a ban on cultivation,” says Chaplin. “It’s basically cutting out everyone, [because] no one is in compliance.” No one who wants to participate in the state’s legal marketplace has only 12 plants, he says.

Only large-scale farms – 25-acres or more – can have up to 25 plants, which makes it hard for the little guy to compete in the market. Sean Powers, director of Nevada County’s Community Development Agency, says the rationale behind the law was to lower the impact on neighboring properties. “As far as cannabis activity, odor is probably the biggest one,” he says. “Some folks really just don’t like it. Other folks have concerns with the size of the grow as far as property crime, or simply traffic.”

However, these rules are debilitating to many small farmers, who have no choice but to shut down or risk operating in violation of local law. Nonetheless, these are only interim regulations – final rules might allow for more. The hope is to have some new regulations work out within the next few months, but even Powers admits that as the rules undergo development “depending on parcel size, one grower might fall in, one might fall out.” But that’s already putting small farmers at a disadvantage — dispensaries can only buy weed from licensed farms; anyone who’s not in the system now has less opportunity to stake out market share later.

Though violating local cannabis law is only a civil violation, it’s subject to tens of thousands of dollars in fines. According to the California Department of Food and Agriculture, which oversees cannabis cultivation, unlicensed operations can be fined up to three times the amount of a license fee for each day they remain unlicensed. However, growers like Chaplin aren’t criminals outright, even though they’re in violation of civil code. Many have been operating for decades under Prop 215, which legalized medical marijuana in 1996, and under SB 420, the 2003 law which set up a nonprofit model for patients to provide patients with cannabis. And they still have some time to use their compliance with these older laws as a defense in court until those laws sunset in December.

In places like Nevada County, cannabis regulatory enforcement is still left up to the sheriffs. “There will be a paradigm shift, since this is more of a code enforcement issue and not necessarily a law enforcement issue,” Bringolf says. But there’s a line in the sand where civil violations end and criminal violations begin – for example, it’s still possible to commit a marijuana crime under Prop 64 if you’re dealing with too much weight.

The issue is when you’re called to a property like Chaplin’s in response to one crime, and sense that another crime might also be in progress, says Bringolf. “If we were there doing a compliance check, we wouldn’t be doing a criminal investigation,” he says. “But when we get there and identify [certain] elements met for a crime, then we have to switch gears.” Going forward as the law changes, sheriffs will need to compare local statutes with the information they observe at the scene so they can properly distinguish among compliance, noncompliance and criminality. But whether law enforcement will get official training to make those distinctions is another story.

Because of the murky way in which the original laws were set up, cannabis cultivators had little governmental oversight as they developed what became the world’s largest cannabis industry. Those who survived prohibition pre-Prop 64 are now vulnerable to extinction. After years of stigmatization and legal risk, they’ve finally helped legitimize cannabis cultivation, now attractive to better capitalized players who could weed them out. To make matters worse, after having promised small growers a one-acre cap on farms before Prop 64 even passed, newly released regulations don’t have acreage caps, which essentially invites big business. In some places, you need a minimum acreage and a couple hundred thousand in the bank just to qualify for a license.

“It’s a continued form of prohibition,” says Monica Senter, founding executive board member of the Nevada County Cannabis Alliance. “The NorCal cannabis brand is born on the backs of these farmers [and] now large corporate farmers are coming in and capitalizing on it. And Prop 64 allows that to happen.” In rural jurisdictions like Nevada County, conservative municipalities are often naïve to trends in progressive cannabis regulation. “There’s a culture clash in rural California,” says Senter, “which results in a negative impact on the small farmer.”

Cannabis industry players fall into three demographics, explains Tawnie Logan, chair of the California Growers Association, and founder of a new consulting company Canna Code Compliance. “About 10 percent of the industry is 100 percent in. They have the perfect property secured, they have financing, business acumen and they’re sold on the concept that the regulated market is the future,” she says. “About 30 percent are in a position of ‘black market for life,’ they’ll never make the transition.”

Then there’s the remaining 60 percent, who, she says, fall into three factions. The first consists of operators who want to become regulated, but have been disqualified. The second faction is under-resourced – they either have no access to banking or can’t get loans. And the third faction are those who meet local regs and have resources, but they’re hedging their bets. “They’re not completely sold that the newly regulated market is the future, or can [help them] successfully make a profit,” Logan says.

But it’s important, she adds, to distinguish between the unregulated market and the clearly defined black market – operators who defy best practices, grow on public lands and traffic human beings. “In the unregulated market, operators have gone above and beyond the call of duty, but still don’t have access to licenses,” she says. So they’re regulating themselves, since they don’t officially comply with local regulations. And that’s the group who’s getting screwed.

“Small farmers, on the one hand, provide irreplaceable value to the economy and culture [of the cannabis industry], and on the other hand they’re very vulnerable,” says Hezekiah Allen, executive director of the California Growers Association. “The financial sector has a long history of devastating small farms and the culture that surrounds them in the relentless pursuit of profit.”

Allen suggests that consumers should buy from dispensaries that support farmers with the best practices. “Know your retailer, know your farmer,” Allen says. “I don’t like to be negative, but don’t buy ‘Walmart Weed,’ yo.” The greatest defense for small farmers in post-prohibition California is an educated consumer: one who buys locally, says Allen, and who cares about the kind of weed they’re putting in their body and the care that goes into growing it.

Small-batch cultivators, who often grow outdoors, have the bandwidth to attend individually to their plants, differentiating boutique bud from cannabis cash crop grown large-scale by new Green Rush businesses who meet minimum standards for “organic,” and often pay little attention to their environmental impact.

“Amazon didn’t buy Whole Foods by mistake. People are interested in craft, well-made healthy products,” says Michael Katz, co-founder of the Emerald Exchange cannabis farmers market. “That’s what the craft farmers of Northern California have and do better than anyone else when it comes to cannabis. That heritage and legacy is what makes California cannabis special, and without that there’s no difference between us and Colorado, Nevada or Arizona.”

As for Chaplin, he’s remaining optimistic. “The grass isn’t always greener in another county,” he says, hoping to stick it out in Nevada County. “We’re the third-largest producer of craft cannabis in the state, after Humboldt and Mendocino.” As a board member of the Nevada County Cannabis Alliance, he hopes his feedback is finally getting through to the county administration: raise the plant canopy – the maximum plant count for smaller parcels – and keep out non-residents, particularly out-of-town big businesses that could come in and buy up land for large-scale grow operations. “To me, the mega-grows don’t have the pulse of cannabis and cannabis culture, and I want to preserve that,” says Chaplin.

In the meantime, he’s trying to get reimbursed for the value of the cannabis the narcotics task force seized after the robbery. He’s also preparing his state license application, so he can apply as soon as Nevada County releases its new regulations. And luckily for him, upon receiving evidence from the sheriffs, the D.A. told Chaplin’s lawyer he wouldn’t press charges.

“The reason why I called the cops is that I don’t want to be underground, I don’t want to be black market,” says Chaplin. “Here I am at [county] meetings as an Alliance board member, I have a brand, and they know who I am and what I’m doing.”

In spite of better-funded competition entering California’s Green Rush, the tension between state and local laws and an industry at risk of losing its culture, the established cannabis community is resilient. “We’re just going to keep doing what we’re doing,” Chaplin says. Now, instead of operating in shadows of the law, Chaplin and those like him are nearly begging for the opportunity to be legal. After all, the state does authorize it. “So if we’re moving away from prohibition [toward] legalization, then we’re pushing for healthy regulation in the county that everyone should be able to follow,” he says. “Reasonable regulation will hopefully mitigate these issues. We’re all fighting for change.”