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Humboldt's Marijuana Industry: Boom Or Bust?

The General

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A recently released report states California's legal cannabis industry is expected grow by billions of dollars in five years, and is set to become a golden economic driver for the Golden State should the industry become legalized in 2016. Within Humboldt, already known worldwide as a cannabis capital, many locals are concerned about whether the rural county will be lead the legalization charge to become the Napa Valley of the cannabis industry or if the industry will be exported to other areas in the state. Sitting at a table in Arcata's Humboldt Patient Resource Center as patients purchase strains of medical cannabis grown at the location, general manager Bryan Willkomm said the idea of losing the cannabis industry to outside forces is something on the minds of many.

"There are rumors that you have cigarette companies branding Humboldt County names of strains – those are the types of concerns that many individuals in Humboldt County have had," Willkomm said. "That the years of work in both the medical and potentially black market industry in cannabis being snatched up by the larger corporations at their benefit, and repatriating that wealth to a multinational corporation versus benefitting the community and workers in Humboldt County."

The legal pot business in the United States, including both the newly legalized retail operations in Washington and Colorado and the medical-marijuana use now allowed in California and 22 other states, is expected to grow this year to $2.6 billion from $1.5 billion in 2013, according to the ArcView Group, a San Francisco-based marijuana research and investment firm. In five years, that number could swell to more than $10 billion.

Although the state in 1996 became the first in the nation to legalize pot for medicinal reasons with the passage of Proposition 215, California has yet to approve it for the overall adult population, or so-called "adult use." Despite that, it has the largest pot market in the nation, according to a widely referenced report last year by ArcView. "California remains the largest state market at $980 million, even without Adult Use regulations," the report states. And "once Adult Use is adopted – which is likely by 2017 – the total California market is projected to increase dramatically."

Within Humboldt, the total amount of revenue generated in the county from marijuana is unknown because there is no concrete data, said Humboldt State University Institute for Interdisciplinary Marijuana Research co-director Erik Eschker. "The guesses that I have seen range from 10 to 25 percent of the local economy," he said. "Those numbers are believable. ... This is not a question that cannot be answered."

Eschker said the only data collected giving any sense of the scale of the local industry was a survey conducted by the institute on Humboldt State University students earlier this year. In the survey, one out of six students stated they had worked in the marijuana industry. "It strikes me as a very large number, and I think that you would find for Humboldt County also a surprisingly large number compared to other regions in the state," he said, adding that the data only represents a subset of individuals in the local area.

Others, like Wonderland Nursery business manager and California Cannabis Voice Humboldt treasurer Luke Bruner, estimated the local revenue generated by the cannabis industry is much higher – up to 80 percent of the local economy. "I think in 2014 our number is $4 billion a year," he said. A 2011 study conducted by Jennifer Budwig as part of her banking thesis also had a billion-dollar estimate, predicting that $2.6 billion in gross revenue was collected by growers in 2010, with about $415 million in marijuana money circulating through Humboldt County annually.

Jason Beaver, development director of California Cannabis Voice Humboldt, said the county's geography, climate and history have attracted the "cannabis titans" to the area, but the money generated from these knowledgable growers is not staying in the county. The recently formed political action committee represents growers and medical marijuana patients. "It's running out of our county," Beaver said. "It's going everywhere else, all over of the world. ... It's already being taken away from us. We have got to grab it and hold on to it and stamp it and make it ours. And we have to do it in a pretty short timeline."

If marijuana is legalized statewide, Robert Sutherland of the Humboldt-Mendocino Marijuana Advocacy Project said big producers will inevitably move in and soak up the mass marijuana market. "We have to be prepared for that," Sutherland said. "I don't think there is anything we can do about that." However, he said, if Humboldt could keep a high-priced, high-quality market if it establishes standards and a way to brand and certify the product.

"There has to be some way of regulating how that is done," Sutherland said. "We need to develop our niche market as developing a specialized, high-quality product." The Humboldt County Board of Supervisors is trying to develop regulation that will be necessary for the needs of the community but not hurt the economy, 5th District Supervisor Ryan Sundberg said.

"Most of us all know that marijuana is huge part of our economy, and many business depend upon that," he said. "It is what it is." Sundberg, who sits on the county's marijuana subcommittee with 3rd District Supervisor Mark Lovelace, said they have tried to be mindful of that. "For myself, I want it regulated and taxed," he said. "I believe it is not going away, and we can either come up with smart policies and rules and have our economy here drive off of it, or we can put our head in the sand and have someone else drive off it."

Agreeing on statewide laws would make it cleaner, safer and possibly more economical, Sundberg said. "It can be an industry like alcohol – there is Kentucky bourbon, there is Humboldt marijuana," he said. In January, the board placed a moratorium on permitting new dispensaries or collectives in unincorporated areas until more comprehensive regulations could be drafted. Supervisors also passed restrictions on indoor medical marijuana cultivation and are considering an ordinance to regulate outdoor medical marijuana cultivation.

Eschker said Humboldt County's future in the marijuana industry is not in the dispensary market. "Our comparative advantage is in the growing of marijuana," he said. "All of this depends on how the regulations are written." As to how the medical marijuana market will handle adult-use legalization, Willkomm said to look to Colorado.

"Our target is a little more unique than large-scale cultivation practices where strict volume is the priority," he said. "In others' experiences, when we went out to Colorado to speak with managers that moved to recreational from medicinal, at the beginning of the legalization stage, recreational use had a massive increase in demand. What that resulted in was a drop in quality in the medicine. That drop in quality was most felt by medical patients who were relying on a certain cannabinoid profile to get the benefited effect."

From mom and pop "bud and breakfasts," artisanal edibles, locally owned farms and environmentally friendly practices, Bruner said the county has an opportunity to utilize what is currently an informal brand to its advantage. "Humboldt County gets $350 million a year in tourism," he said. "Napa County has $3.1 billion. I think we can be Napa's equal. Just like they have 17,500 tourism-related jobs, I think we can have 17,500 tourism-related jobs. People from all around the world are going to want to come here."

Fearing that a potential statewide legalization measure will favor larger "mega-grows" that cut smaller farmers out of the cannabis equation, California Cannabis Voice Humboldt is scheduled to hold a stakeholders meeting at the Wharfinger Building in Eureka on Oct. 22 to draft a local ordinance laying out agricultural regulations unique to the area and protecting the area from corporations that attempt to use Humboldt County as a marketing tool, Beaver said. "We don't have time to deal with what color the door is painted, but we do have time to agree on basic principles that protect and empower Humboldt County as a global leader in cannabis production," he said. "We're not going to stop until we have signatures, ink on paper and then a party afterwards."

Emerald Growers Association Executive Director Hezekiah Allen said the key to success will be coming together as a community to acknowledge that marijuana is an economic driver for the region, work through differences and come up with solutions that will keep Humboldt County on the leading edge. "At the end of the day there is definitely a place for the region in the legalized economy, and that is a place of leadership," Allen said. "Even though we are rural, disorganized and way up there on the North Coast, we need to make sure our voice doesn't get lost."


News Moderator - The General @ 420 MAGAZINE ®
Source: Times-standard.com
Author: Will Houston and Juniper Rose
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Website: Humboldt's marijuana industry: Boom or bust? - Times-Standard Online
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