Business Legalization News

So far, California has 6,000 licensed cannabis businesses. Here’s what that looks like

Quick, guess which California county is home to the most legal cannabis farms?

If you said Humboldt or Mendocino or Trinity — the counties that make up Northern California’s famed Emerald Triangle, long said to supply perhaps 60 percent or more of all cannabis consumed in the United States — you’d be wrong.

Santa Barbara County and cities in its boundaries have received 799 permits to grow marijuana — 14 percent more than Humboldt County, according to CalCannabis, a division of the Department of Agriculture that oversees licenses for cultivators.

That’s one surprising find from an analysis of the nearly 6,000 cannabis businesses that have received temporary state licenses in the four months since California began issuing such permits.

Most of California’s massive marijuana industry is still operating without permits, as a small but growing group of state regulators struggle to convert or shut down the entrenched gray market.

But a close look at the licenses issued so far is offering insight into how the world’s largest legal cannabis market is taking shape, including how few delivery services have jumped to the regulated market, how most of California’s legal cannabis will be grown, and how few labs are ready to test the safety of cannabis products.

Who’s growing legal weed?

The state is issuing 18 different types of cultivation licenses for operations ranging from boutique outdoor grows of just 25 plants, to indoor or greenhouse grows of up to 22,000 square feet. And, as of April 25, CalCannabis had issued 3,490 temporary licenses for cultivation.

But there are more than 50,000 cannabis growers in California, according to an estimate from Hezekiah Allen, executive director of the California Growers Association trade group. That means only about 6 percent of growers have so far made the leap to the legal market.

“There have been fewer cannabis cultivation applicants than originally anticipated, primarily because many local jurisdictions throughout the state have prohibited or banned commercial cannabis cultivation activity, or are in the process of working out a local regulatory process,” said Steve Lyle, spokesman for the Department of Agriculture.

In terms of size, most of the licenses issued so far are for grows that are considered “small,” meaning they’re between 5,001 and 10,000 square feet. The biggest number, 752, has gone to small greenhouse grows that don’t use much electricity, with small outdoor grows trailing close behind with 740 licenses.

Small growers might be leading the pack because there’s no limit on how many small licenses an individual grower can have. But businesses for now can only have one license as a “medium” grower, using between 10,001 and 22,000 square feet. That cap is expected to expire in 2023.

Nowhere has this loophole been more profoundly exploited than in Santa Barbara County, where a half-dozen companies have scored hundreds of “small” cannabis grower licenses plus their token “medium” farm permit.

Central Coast Farmer’s Market Management, for example, has 113 licenses in Lompoc and Buellton. That means the company can cultivate more than 1.1 million square feet (nearly 26 acres) in Santa Barbara County at any given time.

An early draft of state regulations initially capped small growers to one acre of space. But that limit was dropped when emergency regulations came out in November.

The California Growers Association is suing the state Department of Agriculture over that decision, arguing it will drive small growers who built the state’s industry out of business.

“I can’t blame someone for growing big now that that’s what the rules say, but I wish the rules said they couldn’t,” said Allen of the California Growers Association.

More than 43 percent of the 3,490 cultivation licenses have gone to mixed-light grow sites such as greenhouses. Nearly a third of licenses have gone to outdoor grows, with the last 17 percent to indoor grows.

CalCannabis has issued cultivation licenses for facilities in 83 jurisdictions so far.

Lompoc and Salinas lead the way when it comes to cities, with more than 260 licensed cultivators each.

The tiny unincorporated Mendocino County community of Covelo has 110 licenses — one for every 11 residents.

“As more local jurisdictions begin to welcome the cannabis industry, we expect to see more cannabis applicants at the state level,” Lyle said.

To Read The Rest Of This Article By Brooke Staggs on OC Register

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Published: April 27, 2018

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