California Growers Association Divided Over Prop. 64

How divided is the California Growers Association over the Adult Use of Marijuana Act, the statewide legalization initiative that’s going to be on the ballot in November?
Very.
A recent online poll of the group’s membership, a poll that drew more than 500 responses, found that 31 percent would vote yes on AUMA, also known as Proposition 64; 31 percent would vote no; and 38 percent are undecided.
“Academically, it’s a fascinating situation. But we’re not in school anymore,” Hezekiah Allen, the group’s executive director, lamented last week,
Allen was referring, at least in part, to the irony that a cannabis organization is having a hard time supporting a measure that, after 20 years of quasi-legal status, would finally fully legalize cannabis in California.
That irony is not lost on Casey O’Neill, chairperson of the group’s 32-member governing board. “The idea of voting against legalization is hard to stomach,” he said flatly.
But he went on to explain that his doubts about Prop. 64 stem almost entirely from provisions in the initiative that in his view are overly friendly to big business interests and not friendly enough to people like him — in other words, small farmers.
“I’m totally torn and divided,” he summed up. “There are things I like and things I don’t like.”
Sequoyah Hudson, treasurer for the CGA board, said she doesn’t have an opinion about Prop. 64. “I’m neutral. I need to gather more information.”
A small farmer from Northeastern Humboldt, one of her concerns has to do with timing. Specifically, the fact that Prop. 64 is coming hard on the heels of the Medical Marijuana Regulation and Safety Act, a statewide regulatory and licensing program that was signed into law last fall and took effect on Jan. 1.
Like a lot of cannabis farmers, Hudson has been devoting significant time and energy to getting permitted under the MMRSA. She hasn’t been focused so much on the pros and cons of adult use. As a result, she has concerns that Prop. 64 is too much too fast.
“We just got MMRSA. There are medical laws to implement. We should worry about adult use later,” she said.
Allen, O’Neill and Hudson all spoke a day or two after the CGA board gathered in Sacramento last Thursday to discuss Prop. 64. The result of the meeting was inconclusive. Another special board meeting has been scheduled for July 30.
Actually, to hear Allen tell it, the meeting was not entirely inconclusive. “There’s been a subtle shift, from a neutral position to a neutral with concerns position. We are definitely leaning toward opposed, however slightly. We’re a little bit more on that side.”
While CGA is a statewide organization, the bulk of its membership — which includes cultivators, manufacturers and retailers — comes from three regions: The North Coast, with 161 members; the Sierra Foothills, with 145 members; and the Bay Area, with 145 members.
“Our membership [includes] the smaller, independently owned, value-added operations. We want a marketplace for those types of businesses,” Allen explained in an interview earlier this year.
The CGA members favoring Prop. 64 make a number of points, one of which is that its passage would create new, and fully legal, economic opportunities.
“It would expand the size of the regulated marketplace. There would be more marketplace opportunities for businesses that get regulated and follow the rules,” was the way Allen described it.
He said proponents also argue that if legalization is voted down in a high profile state like California, “it would have a negative impact on larger national cannabis policy reform.”
Proponents also point to a criminal justice benefit, particularly for people with past criminal convictions who are currently incarcerated. Allen, however, expressed some skepticism.
“We don’t know how that would work. We don’t know the scope of the criminal justice benefits.”
One thing that he said is clear is that arrests for cannabis violations in California have dropped 75 percent over the past six years.
What that means is that a big rationale for Prop. 64 — removing the threat of arrest and imprisonment — has to a significant extent already taken place.
“So we’re not choosing between prohibition and an end to prohibition,” Allen argued.  “We’ve already mitigated the most severe impacts of prohibition.”
“It’s not an urgent crisis” like it was eight to 10 years ago, he added. “You can’t vote as if it’s 2008.”
In fact, if Prop. 64 is passed and has the damaging economic impact to small growers that Allen and others at CGA fear, then he said full legalization may actually end up increasing criminality.
If their economic livelihood takes a big enough hit, then the little guy “will remain in the criminal marketplace,” Allen predicted.
“People could be in a potentially worse situation than they are in now. [Without] access to a regulated market, [people] will be forced to operate in an unregulated market.”
Such a situation would be “inherently dangerous,” with an increased chance of home invasions and robberies. “That’s what would be forced on most of CGA’s [membership] if the marketplace is consolidated,” Allen warned.
A big reason Prop. 64 poses a threat to small growers has to do with vertical integration — in other words, the dominance of one company over the supply chain.
“If Anheuser-Busch owned BevMo! there would be no microbrews,” was the way Allen described vertical integration.
Unlike the MMRSA, Prop. 64, according to Allen, doesn’t prevent vertical integration, or “market capture,” of the cannabis industry by a few big actors.
“MMRSA is built on a three-tiered model where there is independent distribution. It has strict controls on vertical integration,” he said.
Prop. 64, in contrast, “does not include limits on cross-licensure and multiple licenses and will allow for unrestricted vertical and horizontal integration.”
Another threat posed by Prop. 64 has to do with cultivation size limits. While initial drafts of the initiative called for the creation of a license category that contained no limits on cultivation size, that was removed after groups such as CGA made clear it would be a showstopper.
“We said we would oppose [the entire initiative] if that wasn’t changed,” Allen said.
The fix — to remove the cap on the size of grows in five years — “got us to neutral,” at least for the time being, Allen said.
What that means is that if Prop. 64 passes, CGA has five years to persuade state legislators to remove that part of the law.
“We will fight tooth and nail to get that provision repealed or replaced. The lifting of the cap after five years gives us five years to solve the problem,” Allen said.
O’Neill didn’t disagree, But in terms of “working on it in the State Legislature to get that pulled,” he said that “five years is not such a long time.”
“We’ll just be getting compliant in five years,” he said.
The five-year ban on unlimited grows “gives small cultivators a chance to get established,” added Hudson. But she said in a way that might make things worse. Because once the cap is lifted, big operators “could come in and destroy what small cultivators have built. So that would really be devastating.”