Marijuana legalization likely to favor large companies

Alexander Lawrence,
Contributor
November 9, 2017

Independent growers at risk

Richard Colorado’s thumbs and forefingers have permanent calluses from bending the stems of his marijuana plants in such a way that they get better access to light, which increases his yields. His small, 15-light setup is enough to keep him working 50 or more hours a week and enough for his home to pay for itself through sales of his product.

Colorado is an independent marijuana plant grower out of Santa Rosa. When dispensaries made it legal for independent growers to sell their product, it allowed Richard a much safer way to sell his product, and he could then stay off the streets.

Colorado has looked forward to the legalization of marijuana for most of his growing career, but he’s now facing unforeseen challenges. The “Sour Diesel” he grows is currently a mainstay at a local dispensary, but new legislation may prevent him from selling to that same local clinic in 2018.

“I’m certainly not going to quit growing, but I’m not looking forward to selling illegally again,” Richard said.

Residents of California voted in 2017 to approve the growing, consumption and sale of marijuana. This allows larger companies to have legitimate licensed medical grows, but the new legislation may not benefit small time independent growers as well: they will likely have difficulty obtaining permits.

In 2018, the legalization of marijuana in California will be in full effect. Industry analysts believe that the new laws are likely to favor larger companies who are already permitted and have licensed grows with their own dispensaries over small time growers, many of whom have been actively growing marijuana product for years.

“The less competition the better the profit margins,” said Arnold Cunningham, part owner of Collective Efforts, one of the leading Cannabis companies in California. “We don’t need any more vendors showing up with untested product to our medical dispensary. We have plenty of our own product to worry about.”

Growers who have been growing without permits will not be able to vend to dispensaries, which was the only legal way to sell and distribute your product under the previous rules. Marijuana dispensaries must be self-sufficient in 2018, which means they are required to grow their own product and therefore not legally allowed to purchase product from independent vendors.

Many independent growers feel that they will be forced to sell their product in the street illegally, unless they can become connected to a licensed dispensary. But this is not easy.

It has not yet been decided how many permits will be for sale per city, and there is a chance they could go up for auction to the highest bidder, according to the California Growers Association. Outdoor growers, like those in Humboldt county, will face lawsuits unless they can attain cultivation permits and become connected to a licensed dispensary. Many families have been growing for years and have been passing the trade to their children, but their way of life is up for a reality check.

The amount of plants per household that can be grown legally varies from city to city. Oakland for example is 97, and Alameda is a mere six. The new law in California states only six plants can be possessed at a time, statewide. There is no longer a discrepancy between cities, and it doesn’t matter if the plants are babies or full grown: six is the new limitation.

Certain cities can prohibit outdoor growing, but they cannot prohibit indoor growing. The city of Concord wants to lower the household plant count to three, which in the long run means you will have to purchase marijuana from dispensaries. Growers can typically only harvest outdoors once per year, and indoors every three months. Unless you are growing indoors, having only three plants grown outdoors is not enough to last you the year. Growing indoors is also expensive, and if you are only allowed to grow six plants per cycle, it isn’t worth the cost of production.

This new limitation of how many plants may be legally grown in California is also another reason why larger companies are likely to be favored in 2018. By pushing out independent growers, consumers will be forced to comply with the laws and purchase from dispensaries.

The regulation of alcohol is similar. Citizens can privately brew beer at home but cannot create hard alcohol, because it could create a disruption in the current alcohol market. New marijuana laws won’t come into effect in January, and it could take until June to get all the regulations sorted out. Growers may have an opportunity to get their sites permitted and up to code if they have not done so come this January.