The idea was pretty simple: allow licensed small farmers who specialize in growing marijuana to directly sell marijuana to private citizens in local temporary events – farmers markets for the cannabis industry. Somehow the bill was defeated, and the farmers are left wondering what happened? Was this Northern California vs. Southern California, the big guy vs. the small guy, or was it some other lingering issue that caused its demise?
Assembly Bill 2641 would have permitted issuance of temporary licenses by the Bureau of Cannabis Control. The main reason for drafting this bill is the recent approval of Prop 64 making it nearly impossible for these events moving into 2019. While most view the passing of Prop 64 as a success for legalizing recreational marijuana, it limited direct sales by growers who did not also have a retail sales permit, and as a result, many small and even medium-sized operations could not even qualify for such a license, and most could not afford the cost. These licenses would have allowed “on-site sales and consumption of cannabis at temporary events.”
The bill died in committee and never made it to the floor for a vote.
Who opposed This Bill?
From an analysis done it appears that there were two main oppositions to this bill. Many of the large scale dispensaries and growers like Canndescent coupled with the Los Angeles based group called United Cannabis Business Association (UCBA) showing no support for the bill and causing it to lose steam. Canndescent intends to use micro-grow techniques to have higher yields and better varieties readily available, and it appears from their opposition of this bill that they are concerned some small-scale farmers might mount competition by offering more top quality products for lower prices, with no tax. As such, they did not like the possibility that farmers markets could offer competition or erode their high-end profit margins even though the farmer’s markets are not open daily like dispensaries.
Who is the UCBA?
The UCBA primarily represents Los Angeles and Orange County Medical Dispensaries, and they call themselves the “Champions of Regulated Cannabis.” So why are they opposed to the markets? It appears that there is concern that farmer’s markets could allow recreational consumers to obtain material at less than current market prices. This comes directly from a letter sent to legislators by the UCBA: “This legislation would cut a large consumer base from licensed retailers that are paying high taxes and having a difficult time staying open. This legislation will permit a cultivator to set up an event every day of the week and sell their products directly to consumers. This legislation undermines our whole cannabis regulatory system.” Additionally, the UCBA got the United Food and Commercial Workers Union (UFCW), which is the union representing food retail, processing, healthcare, and the cannabis industry, to write opposition letters. The opposition letter from the union is an almost word-for-word repeat of the UCBA letter. There seems to be a common theme here: current power players don’t want prices to erode due to farmers markets. There is concern that people would prefer to get fresh hemp in a farmer’s market than to go to their dispensaries and pay premium prices for virtually the same or better quality products similar to traditional farmers markets.
Direct Result of the Bill’s Failure
Hezekiah Allen, of the California Grower’s Association, predicted that of the more than 900 licensed growers who would have participated in such events, 400 are likely to go out of business this year. Of the remaining 500, about half heavily rely on these temporary sales events for their livelihood. This means that three-quarters of the small farmer growers are at risk due to this bill’s failure. Other supporters included the California Cannabis Industry Association and several county governments representing constituent small-scale marijuana growers whose primary income (both the farmer and the county) depends on their growth and sales success, but they too face a similar outlook with the bill’s failure.
How does this compare to other items in a Farmer’s market?
Let’s consider how Farmer’s markets normally work. While there are fees associated when obtaining a license for selling at a temporary event, farmers, for the most part, would bring raw food to tents with tables and sell directly to the public. Food is a regulated item. Grocers certainly make money selling food and could easily have made the same argument that UCBA did – namely that this undermines their business and works against the regulation that “protects” the public. Grocery store chains could have taken a similar stance when the “organic” industry was in its infancy, but they didn’t. They could have quickly tried to squash the farmer’s markets where the growing trend of organic produce was being sold, but instead, they learned from the markets, listened to the consumer and today you see organic produce sections in nearly every store nationwide.
Published: February 19, 2019
Founder & Interim Editor of L.A. Cannabis News