Growers Association Still Divided Over Proposition 64

With three months to go before voters decide the matter, the California Growers Associations remains divided over the statewide legalization initiative known as the Adult Use of Marijuana Act.

“Thirty-one percent say yes, 31 percent say no and 38 percent are undecided,” Hezekiah Allen, CGA’s executive director, said last week in reference to the group’s latest online survey of its membership.

“There’s no real indicator things have changed” in terms of the organization’s stand on the initiative, also known as Proposition 64, he added.

While CGA is a statewide organization, the bulk of its roughly 700 members — who include cultivators, manufacturers and retailers — come 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 fact that there are provisions in Prop. 64 that are seen as overly friendly to big business interests and not friendly enough to small farmers lies at the heart of the doubts some members have about the measure.

Those favoring Prop. 64, meantime, say 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.

It boils down, in other words, to a debate over growth and sustainability, to an argument between those who give greater weight to enlarging the cannabis industry and those who attach more importance to protecting existing businesses.

A sign of the dilemma can be seen in the response CGA members gave when asked to rate their level of support on a scale of one to five, with one indicating strong opposition and five indicating strong support.

The average rating was just 2.4. That’s hardly a ringing endorsement. On the other hand, it’s close to the middle of the one-to-five scale, so it’s not a clear condemnation either.

A stronger signal was sent when 74 percent said they favored limits on the size of cultivations. Currently, Prop. 64 allows for a license category, known as a Type 5 license, that would contain no limits on cultivation size after a five-year period.

Fifty percent, meantime, said restricting cross-licensure to prevent vertical integration — in other words, domination of the market by a single business — was a top priority. Prop. 64 according to Allen doesn’t contain such a restriction.

“So people don’t like unlimited size licenses and they don’t like that businesses can hold [multiple] licenses,” Allen summed up.

On that last point, Prop. 64 stands in contrast to 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.

“MMRSA is built on a three-tiered model where there is independent distribution. It has strict controls on vertical integration,” Allen explained.

In general, he said the licensing system set up by MMRSA is “a protective regulatory framework” that is “mostly friendly to small businesses.”

“Prop. 64 would undo a number of those protections,” he said.

While he noted that in developing Prop. 64 a number of things were “cut and pasted” from the MMRSA, he said that “in fundamental ways Prop. 64 takes a different path.”

If Prop. 64 becomes law, the State Legislature would need to reconcile it with the system set up by the MMRSA. How that might play out is anybody’s guess.

What Allen says he knows for sure is that lifting the cap on cultivation size would not be a good thing for small farmers.

“It would open the floodgates to consolidation,” he declared. “We’d rather have 25,000 half-acre operations” than a small number of giant farms “where there would be no market share for anyone else.”

Officially, CGA’s position on Prop. 64 is “neutral with concerns.” But when asked last week if a more accurate description would be “neutral leaning against,” Allen responded in the affirmative.

“Folks are supporting it because it’s the only [legalization] option on the ballot. I don’t hear lots of people who love it. It’s the Hillary Clinton of cannabis legislation.”

“‘It’s better than prohibition’ is about all that I hear from folks who support it.”

And where does Allen himself stand? He says he’s not sure.

“Even with all the concerns I have, personally I am undecided,” he said.

A big reason for his uncertainty is that, after 20 years of marijuana’s quasi-legal status in the state, there’s now a chance for full legalization.

“It would be really difficult to vote no. It’s difficult and frustrating to be in a position where I’m not sure. I wish [Prop. 64] were a home run, that it was something we could all agree on. But it hasn’t proven to be that.”

Adding to the frustration is that coming out against Prop. 64 would place CGA members in the same camp as the law enforcement-driven opposition to the measure.

“We don’t agree with the opposition any more than [with] the proponents. Our members don’t have a voice,” Allen lamented.

Given that legalization has won voter approval in other states recently, such as Colorado and Washington, there’s reason to believe that Californians aren’t likely to give legalization the thumbs down. Prop. 64, it would seem, has something very important on its side: Momentum.

But Allen said there could be factors working against it. One is simply that the ballot this year is crowded with such a large number of different measures — 18, to be precise — that voters may be disinclined to give many of them their imprimatur.

“Californians often don’t view favorably” a complex ballot, Allen remarked.

The fact that Prop. 64 itself is long and complex might also bode ill for the measure.

Finally, there’s the fact that former Facebook President Sean Parker has poured millions into the Prop. 64 campaign.

“Californians often reject [initiatives] when they are associated with a single big donor,” Allen asserted. “So I don’t think it’s a sure thing. I think it’s more of a tossup than the polling suggests.”