Looking out for the Little Guy 

There's a cannabis tug of war going on in Sacramento and it's starting to look like one side may have a lot more heft than the other.

The California Department of Food and Agriculture (CDFA) sent shock waves through the state's marijuana industry Nov. 16 when it released emergency regulations aimed at guiding the nascent industry through its first months of full-scale legalization (see "Bait and Switch," Nov. 23). While a cap limiting the size of cannabis farms had long been a central part of the conversation — from years-long legislative efforts to the campaign for Proposition 64, which legalized adult recreational use, and even in the department's own environmental impact report released just days earlier, the department effectively removed any limitations on how much weed a single farmer or corporation can grow.

While this is obviously a huge concern to relatively small-scale farmers who are afraid they can't compete with the Monsantos of the cannabis world, regulators have also voiced opposition, noting that California is already producing way more marijuana than it consumes (see "Way. Too. Much. Weed.," Oct. 5). CDFA's abrupt change of approach also didn't sit well with North Coast legislators Assemblyman Jim Wood and Sen. Mike McGuire, both of whom had worked hard on bills aimed at protecting small farmers that were ultimately usurped by the new emergency regulations.

"We support the protection of small family cannabis farmers — the backbone of California's cannabis industry — and are deeply concerned that a lack of a cap on small cannabis cultivation permits is undermining the desires of California voters expressed through Proposition 64," the legislators wrote in a letter to the California Cannabis Licensing Division.

"This last minute revision rolls out the red carpet for large corporations to crush the livelihood of small family farmers who should be given a fair chance to succeed in a regulated market. ... Regulating cannabis and protecting small farmers will become exceedingly difficult if CDFA doesn't close the loophole they created that allows large industrial grows contrary to Proposition 64 and the legislative agreements that have been struck over the last 36 months."

The California Growers Association, meanwhile, has circulated a petition calling for CDFA to implement a 1-acre cultivation cap until 2023. It quickly drew 3,000 signatures, which it submitted to the state, along with endorsements from 10 advocacy organizations.

But there's noticeably one high profile group that is urging CDFA to hold firm on the change. The California Cannabis Industry Association sent the licensing division a Dec. 5 letter registering its "strong" opposition to the proposed 1-acre cap.

The group argues that local ordinances are sufficient to constrain the supply of cannabis, caps undermine local control and that rigorous testing standards will limit supply. Then, in what appears to be a bit of a Jedi mind trick, the group argues that "caps disadvantage smaller cultivators."

"Outdoor cultivation is already limited to one harvest per year, while indoor and mixed light cultivation can yield up to five-six harvests per year," the letter states. "Hence, imposing such a cap would severely compromise seasonal cultivators ..."

What seems to be absent in this line of thinking is any recognition that the absence of a cap doesn't limit the ability of indoor and mixed light growers to go huge, either, meaning the inequities of the different grow techniques remain without the cap, only on a limitless scale.

So what is this association and who are its members, you might ask. Well, the association's mission is "to be a leading force in the growth and health of California's cannabis industry." Among its members are Arcview Group and Poseidon Asset Management, both of which landed on Forbes' list of the "Top 5 Financial Leaders" in the cannabis industry. There's also Privateer Holdings, the Peter Thiel-backed parent company of Marley Natural that aims to be the "Marlboro of marijuana." There's also MJ Freeway, which boasts of having "processed more than $5 billion" in sales.

We'll leave it up to you to decide just how concerned the association is about whether "caps disadvantage smaller cultivators."

Thadeus Greenson is the Journal's news editor. Reach him at 442-1400, extension 321, or [email protected]. Follow him on Twitter @thadeusgreenson.