Lawmakers, Growers Talk ‘Official Agricultural Crop’: Cannabis

A crowd of some 200 people turned out for a Jan. 29 public forum on the Medical Marijuana Regulation and Safety Act (MMRSA) held at the Mateel Community Center.

Presided over by two of the primary authors of the legislation, state Sen. Mike McGuire and Assemblymember Jim Wood, along with Humboldt County Supervisor Estelle Fennell, the gathering was a kickoff event of sorts. For while the bill, signed into law last fall, took effect Jan. 1, the specific rules and regulations guiding the new statewide regulatory and licensing program have yet to be developed.

“The real work begins tonight,” McGuire proclaimed at the start of the meeting. Explaining that feedback from growers and others involved in the North Coast marijuana industry would be vital as the program takes shape over the next 24 months, he said: “We want you at the front end of the discussion. We want to get your input.”

“Lots at the state level don’t know how your industry works,” added Wood, who said the rules and regulations would constitute the “nuts and bolts” of the new regulatory structure. “The regulatory process begins now.”

Saying that “snags” will be unavoidable, he told the audience that one screw-up that’s already taken place is in the process of being fixed: a drafting error in the legislation that required cities and counties to approve cultivation ordinances by the unrealistically early date of March 1 or lose licensing authority to the state.

“A bill [to fix the problem] is already on the governor’s desk. If it’s signed, the March 1 deadline will disappear,” Wood told the crowd.

While the mistake didn’t affect Humboldt County, which approved a commercial medical marijuana ordinance this past week, it posed something of a threat to the MMRSA itself, since the new law calls for a two-track licensing program. “We need local participation and state licensing to make the whole thing possible,” explained Hezekiah Allen, of the California Growers Association, in an interview on Sunday.

Fennell, during her introductory remarks on Friday, made clear that the Humboldt County ordinance amounts to a large step forward, although one that was not taken without some pain. “The creation of the Humboldt County ordinance happened at lightning speed. You don’t get out of it without a few scars. We did a very good job.”

She said the new legal reality, both at the state and county level, “provides a clear path to compliance for those tasked with enforcing the law,” such as Humboldt County Sheriff Mike Downey, a panelist during Friday’s discussion; District Attorney Maggie Fleming, who was in the audience; regulators with the North Coast Regional Water Quality Control Board; and others.

The step “increases public safety by eliminating the crime and violence that attaches itself to the underground market,” she added.

The heart of the meeting consisted of three panel discussions, the first of which was comprised of state officials. Adam Quinonez, assistant deputy director of the Department of Consumer Affairs, told the crowd that a new state agency, the Bureau of Medical Marijuana Cultivation, would license distributors, dispensaries and transporters.

“Some say that distributors [will be able] to set whatever price they want, [that they] can control access to the market. The distributor will be just as highly regulated as everyone else. They won’t have unlimited authority to set prices.”

In an interview afterwards, Quinonez emphasized that watching out for the consumer would be a priority. “We see this as a consumer protection model,” he said — citing, as an example, that the state wants to make sure that labeling information on marijuana products is accurate.

“You can make money. You can be for profit. But you will be highly regulated. You need to abide by the rules,” he warned.

Jim Houston, undersecretary of the Department of Food and Agriculture, drew cheers from the audience when he proclaimed marijuana to be “an official agricultural crop.”

He quickly went on to make clear, however, that it was a crop that his department at this point doesn’t know much about. “We need to learn the scale of the industry, the number of grows, the number of plants. It will be a bit of a guessing game on our end regarding what the scale of the [regulatory] program needs to be,” he added.

Houston said his department is in the process of “hiring folks” to run the new regulatory program. Phase two, he went on, will involve the drafting of specific regulations, a process that will be accompanied by the development of an Environmental Impact Report, or EIR.

“As regulations are developed, they will feed into the EIR. We will have public comment” on the proposed regulations, he explained.

In terms of the regulations themselves, they will pertain to a number of matters, including licensing, marketing, labeling, taxation, transportation and resale. Regarding licensing, Houston said there would be nine types, based on factors such as whether the commercial operation is “indoor, outdoor, mixed, light or specialty.”

Phase three, he said, would begin on Jan.1, 2018, when those in the marijuana business will finally be able to become licensed. “We need to structure the regulations so that they don’t prejudice small businesses. Small and big farmers alike [should] have the opportunity to get licensed.”

Lt. DeWayne Little of the Department of Fish and Wildlife, said that the passage of the medical marijuana law hasn’t exactly brought about a sea-change in terms of his department’s main tasks. “Our responsibilities haven’t changed. We’re here to protect listed endangered species. We’re here to protect your environment.”

“None of our laws have really changed,” he repeated, saying that priority would continue to be given to matters such as “ensuring adequate flow [in waterways] and keeping toxins and excess sediment out of streams.”

Nonetheless, he did not deny that monitoring the environmental impact of thousands of newly legitimate marijuana operations in the state would be a big job. “We have a daunting task and we have limited manpower. With the new legislation, we hope [increased staff can be made available].”

He said the cannabis industry would be treated the same as other industries that have significant environmental impacts, such as the timber industry and the dairy industry. He also said that particular attention would be paid to “ensuring that water stays in streams.”

“There is a notification process [to go through] if you want to alter a streambank or divert water. We need you to cooperate with us so we can tell you what you can and cannot do.”

John Corbett, chair of the North Coast Regional Water Quality Control Board, emphasized that the board pays particularly close attention to the water quality impacts of agricultural operations.

“You can grow tomatoes, strawberries or cannabis, but don’t dump dirt in the stream,” Corbett warned.

During a second panel discussion involving county officials, Downey said that the regulatory process for implementing the new state legislation can be used to fix flaws in Proposition 215, the 1996 measure that legalized marijuana for personal medical use.

He said he also expects the development of “some type of data base in the future, [so] we’ll know where the [cannabis] farms are that are in compliance with state law.”

Steve Lazar, a senior planner with the Planning and Building Department, said that as a bureaucrat, it has been frustrating to deal with “the regulatory vacuum that has existed since Prop. 215.”

“Now there is statewide regulatory cover to have confidence to move forward. There was not a pathway that wasn’t fraught with problems.” Although he also cautioned: “The pathway ahead could be fraught with problems.”

Regarding the just-passed county ordinance, Lazar said an additional three to four staffers would probably be needed to handle the new regulatory responsibilities.

The third and final panel discussion featured industry representatives like Luke Bruner, business manager of Wonderland Nursery, and Allen, who said that 2015 saw “a revolution in cannabis policy.”

“It’s the dawn of a new era,” he proclaimed, pointing out that the new state law pertains to a host of matters, including licensing, appellation controls and watershed protections.

The meeting at the Mateel itself is historic, Allen went on, in that it underscores the industry’s newfound legitimacy. “We needed an acknowledgement [from official agriculture]. The fact that we have Jim Houston here in the room today [is a big deal],” Allen said.

But he also sounded a cautionary note, saying that the new reality means that “lots of growers won’t make it. There are lots of practices and sites [where they shouldn’t be].”

Another panelist, Amber Cline of Happy Day Farms, a northern Mendocino medical cannabis farming operation, expressed concern about a number of things that might happen under the new state law, such as overregulation; the possibility that the issuance of a limited number of licenses could “cause divisions in the cultivator community;” and the possibility that “high fees and taxes could encourage farmers to stay underground.”

“We will need third-party certifiers to interface between growers and regulators [due to a] deficit of trust,” she stated flatly.

In response to Cline’s worries, Wood said, “Zero-to-100-miles-per-hour regulation would be hugely problematic for the [cannabis] industry. The realization from [the] State Agriculture Department is that they get that,” Wood told the crowd.

“The worst thing they could do is overregulate really quickly. That would make compliance a nightmare,” he added.

During the public comment portion of the meeting, the issue of taxes and fees came up again. Robert “Woods” Sutherland, of the Humboldt Mendocino Marijuana Advocacy Project, or HuMMAP, charged that “the new laws reek of new taxes and fees. Odious fees can kill small farming.”

Another speaker, Karl Witt, who identified himself as a Southern Humboldt cannabis farmer, said: “Growers will come into compliance if they’re not paying higher than a 15 percent tax.”

McGuire at one point interjected, “Lots of people in Sacramento think the industry hasn’t had to pay any fees for 20 years. So we need some fees.”

But he also sounded a note of assurance.

“This legislation will protect the North Coast. Small family farmers will have a seat at the table. That’s why we brought forward appellations instead of large dispensaries. That’s why we have a tiered system so one entity can’t own the entire system.”