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• The settlement includes a record penalty for a water rights violation in California.

Of the total, $500,000 is a record penalty for a water rights violation in California. State officials say the violations by Joshua Sweet and the companies he owns and manages, Shadow Light Ranch, LLC and The Hills, LLC, continued for years and were “egregious,” damaging wetlands and other resources. 

Under the settlement, Sweet will have to pay an additional $1 million if the remediation work outlined is not completed.

In a statement to CalMatters, Sweet said, “If the full penalty and remediation costs were due today it would take everything I own.”

“Although I will follow through with my end of the settlement, I do not believe this is fair or just, and I believe I have already suffered way too much,” Sweet, a licensed cannabis cultivator, said in the emailed statement. 

“Even during our court-mandated settlement conference, they were asked why they would go after a small independent businessman with these type of enormous fines usually reserved for huge corporations that destroy ecosystems.”

In the settlement, Sweet agreed that “developing the properties in Humboldt County … resulted in violations of the California Fish and Game Code and the California water Code.” 

The companies’ 435 acres of land are part of the Emerald Triangle, where cannabis reigns. Springs and streams of the Bear Canyon Creek Watershed cross the land and eventually drain into the South Fork Eel River — a wild and scenic river that provides critical habitat for threatened and endangered species of steelhead, Chinook and coho salmon. 

The settlement comes as the cannabis industry is still trying to find its footing after legalization, and as its water use, especially for illegal cannabis operations, becomes increasingly contentious.

The agreement, approved by the Humboldt County Superior Court and announced last week, is the culmination of years of inspections by state water and wildlife officials dating back to 2016, according to the timeline outlined in the initial complaint. 

It “resolves violations … that include: the owner’s destruction of wetland habitat and stream channels; conversion of oak woodland to grow cannabis; and failure to … satisfy permitting requirements,” the state’s announcement of the deal said.

Yvonne West, director of the State Water Resources Control Board’s office of enforcement, said Sweet didn’t have authorization to divert water to the reservoirs and use it. Between 2017 and 2020, Sweet took about 16.2 acre-feet of water for three ponds, according to an email from the water board — approximately enough to supply about 49 households for a year. 

“The ordered penalties are modest given the scope of damage, the length of time the site has been left unremediated and considering the unjust enrichment or benefit to Mr. Sweet from running a business for several years without going through the necessary permitting process,” said Jeremy Valverde, assistant chief counsel at the California Department of Fish and Wildlife, in an emailed statement. 

Sweet and his businesses “for years resisted our attempts to cooperatively work on restoration and recovery of those resources, leaving formal enforcement as our only option,” said Joshua Curtis, the North Coast Regional Water Quality Control Board’s assistant executive officer.

Sweet said, though, that the case didn’t have to play out like it did. “Offers were made and denied,” he said. “There would be no settlement without their need to ‘make an example of me first’.”

The size of the penalty is notable because the water board has limited powers to enforce California’s arcane water rights system. A weeklong standoff during a drought, when ranchers pumped more than half of the Shasta River’s water in violation of state orders, netted a $500 per day fine that reached $4,000, or roughly $50 per rancher. 

State lawmakers floated a bill last year that could triple the fines for water rights violations, though the bill has thus far stalled. And in 2022, a new law enhanced penalties for cannabis-related violations to $3,500 per day, though this took effect after then-Attorney General Xavier Becerra filed the complaint. 

“This was an ongoing use by Mr. Sweet and the penalties are over an approximately four-year period for unauthorized diversion and use of water to support cultivation,” West said. “Five hundred dollars a day, multiple violations over a four-year period, does really add up. And then again we did have the additional types of violations at play here as well.”

The cannabis operation’s complex irrigation system came to state officials’ attention after Sweet notified the Department of Fish and Wildlife of plans to further develop the property in 2015, the 2020 complaint said.  

Over the years, inspections by state agencies turned up “violations … for unlawful alteration of the bed, channel, or bank of a stream and … unlawful sediment discharge into waters,” the complaint said. They also turned up storage tanks and three storage ponds, two of which predated his ownership and one that, according to the complaint, Sweet had constructed despite the warning that it needed a permit. 

The pond was in a location that “disturbs/inundates wetlands with a direct hydrologic connection and discharge to a … tributary to the South Fork Eel River,” the complaint says. “Additionally, the Property’s other ponds, multiple illegal stream crossings, and road-associated landslide discharge or threaten to discharge to unnamed tributaries of the South Fork Eel River.” 

The pond is one of the reasons state officials considered the case egregious, West said. “We didn’t have the opportunity to review and catalog the status of that wetland or the benefits of that wetland before it was destroyed.” 

Sweet, the grower, said the lengthy process “has caused so much undue and unnecessary strain, pain, and suffering on me and my health, my family, my friends, and this community.”

“I thought what I was following the law and had hired the proper professional team to abide by the myriad of requirements,” Sweet added. “My suffering does not end, and I will continue to struggle for the foreseeable future. Which is, I guess, what they wanted.”