After A 

After spending some 18 months on edge, the local cannabis cultivation industry exhaled on Election Night, as Humboldt County voters overwhelmingly rejected Measure A, a ballot initiative that sought to overhaul local cultivation regulations and farms warned could have catastrophic consequences.

Sitting down with the Journal about a week after the election, and just a few days after the latest report from the Humboldt County Elections Office showed just 27 percent of county voters support Measure A, also known as the Humboldt Cannabis Reform Initiative, Humboldt County Grower's Alliance (HCGA) Executive Director Natalynne DeLapp says she's relieved. The measure, which sought to revise the county's general plan and, if passed, could only have been modified through another vote of the people, would have had devastating impacts to the county's small farms, she says, which are already struggling. As such, DeLapp says, she and others threw as much time and energy as they could into campaigning against it to the point the effort became nearly all consuming.

"What was in jeopardy was the very heartbeat of Humboldt's cannabis industry," she says. "HCGA's mission is preserve, protect and enhance Humboldt's world class cannabis industry. Everything about Measure A put that in jeopardy. So yeah, we organized and we fought like hell to protect our industry, our heartbeat. ... I wish we didn't have to do what we just did, but I'm glad we accomplished what we have. It's like finishing a marathon you didn't sign up to run."

The focus now shifts, both for the industry and those working to regulate it. A popular message in the opposition campaign was that current regulations are flawed and imperfect, but Measure A was not the answer. That idea had so much heft behind it that the Humboldt County Board of Supervisors strongly considered floating a counter initiative to Measure A that would have put a set of alternative revisions before voters before it ultimately abandoned the idea. DeLapp, HCGA Policy Director Ross Gordon and others advocating the industry's interests, meanwhile, say fighting Measure A came with opportunity costs, and they are now looking forward to putting their full weight behind efforts not to stave off catastrophe but to improve conditions for Humboldt County's farms.

Measure A proponents Mark Thurmond and Betsy Watson did not respond to a request to comment for this story.

On the regulation front, there seems to be a consensus that there is some low-hanging fruit that is likely to be addressed in relatively short order. When the board considered its countermeasure, one of the things it would have included is a cap on the number of cultivation licenses available countywide — something that was also included in Measure A.

The county's current cap of 3,500 licenses was set at a time when market forces were considerably different than today, with the wholesale cannabis market having yet to recover from a massive price crash in 2021 fueled by a statewide oversupply of cannabis into the regulated market. In November, county Planning Director John Ford reported the county had about 1,578 licenses issued and applications in progress, and staff recommended setting a cap at 1,400, feeling attrition would naturally bring the number of licenses below that. (HCGA, meanwhile, had pushed for a cap of 1,600.)

But the reality is that the county is no longer being bombarded with new applications and people are no longer lining up to set up cultivation operations in Humboldt County, contrary to assertions from those on the Yes on A campaign that the county is in the midst of another green rush.

"It is imploding," DeLapp says of the industry. "It's shrinking and shrinking and shrinking, and this narrative that was perpetuated is just so out of touch with what is going on."

But within the cap conversation, there are likely to be friction points.

The county currently has not just a total countywide cap on licenses but also caps by watershed, all of which dwarf the numbers of permits issued or in process in them. But some — including Fifth District Supervisor Steve Madrone — feel the watershed caps fail to meet their mark. The reality, Madrone says, is that in some watersheds, cultivation operations are clustered in certain neighborhoods, concentrating impacts and frustrating some residents. Madrone specifically pointed to the Mad River and the Middle Main Eel watersheds, where grows are almost exclusively clustered in Maple Creek and Honeydew and Petrolia, respectively.

"Those neighborhoods got severely impacted, which was part of the pressure behind Measure A," Madrone says, adding that he plans to raise the topic of community caps, like those the board used for short-term rental regulations, when the matter comes back to the board.

Another piece of low-lying fruit, DeLapp says, are mitigation measures already being deployed by the Planning Department and the Planning Commission that have not yet been codified into ordinance. The Planning Commission is already writing requirements for hydrological groundwater studies, phasing out the use of generators and shifting toward renewable energy sources into permit conditions, she says, which could explicitly be written into county ordinances.

Gordon says the primary complaint he heard when out campaigning against Measure A was "green houses that are lit up at night," which is already outside the lines of current regulations, making it simply an enforcement issue.

Enforcement generally is likely to ramp up in the near future, Madrone says, noting that local farms who owe cultivation taxes to the county have until the end of this month to enter into a payment plan to pay off their balances by Dec. 31, 2025. Those that are arrears in tax payments but fail to enter into payment plans with the county this month, Madrone says, will be forwarded on to code enforcement and the sheriff's office.

"That will be a focus list for enforcement," he said. "So we're reining in these low-lifes who should not be a part of Humboldt."

Not responding directly to Madrone, DeLapp says some of the rhetoric directed at farmers with unpaid tax bills has been extreme. She pointed to the IRS granting all Humboldt County taxpayers an extension last year from April to October as a comparison.

"Just because people took advantage of a tax extension does not make them delinquent," she says.

But she says the reality is that the industry faces a "deck clearing" with cultivators having to make good on owed taxes and the state no longer granting provisional licenses after this year. DeLapp also notes that the current distribution system is "fragmented and highly vulnerable," lumping virtually all risk on farmers, who turn over their product for a promise of payment that may never come, adding she knows many who are owed tens of thousands of dollars. And this year, she says, some farms will have to come up with a considerable amount of money to cover tax bills, license fees and compliance costs to continue operations.

"I am highly concerned that there are going to be a number of farms that aren't going to be able to overcome those barriers," DeLapp says. "I'm hearing from a number of farmers who don't have the money, who just still don't have the money. Every year I think we say this, that there's going to be a reckoning, and this year's not going to be different. The number of farms licensed and operating next year is going to be lower than this year."

And that makes DeLapp and Gordon eager, with the election over, to focus all their energy on changes designed to help the struggling cultivation industry. On the county level, they say they are focused on changing regulations to allow more diversification, to make it easier for farms to add nursery areas, on-farm tourism opportunities, on-site processing and manufacturing.

"Ultimately, we are going to compete on craft and quality and not quantity, and in order to be able to compete on craft and quality, we need to control as much of the product and process as possible," Gordon says, adding that ideally involve changes at both the state and local level.

Another thing HCGA will be pushing for is passage of Assembly Bill 1111, which, co-authored by North Coast state Sen. Mike McGuire and Assemblymember Jim Wood, would allow farmers to directly sell their cannabis to consumers at special events. The primary draw here, Gordon says, is it would allow farmers to speak directly to consumers and promote their brands, though it would allow them to sell directly to customers without a retailer while charging retail prices.

But the most exciting aspect of the bill is the marketing possibilities, Gordon says, noting that it ties into other efforts on that front as well. The state's appellations program is set to launch toward the end of this year, he says, which will allow region-specific marketing efforts to differentiate farmers' products by tying them specifically to place and certain characteristics.

DeLapp says HCGA is also launching an "Ask for Humboldt" campaign that will begin by encouraging local consumers to ask for locally grown and crafted products at local dispensaries. The reality of retail cannabis is that flower arrives at dispensaries at least once removed from farmers, having been channeled through a distributor. Once at the dispensary, it's up to budtenders — often working at close to minimum wage with lots of turnover — to inform consumers about their choices. A lot can get lost in translation, DeLapp says, which is why the campaign's focus will be urging consumers to request local products to drive demand.

"There's just really this huge disconnect between the farmer and the consumer," she says, adding the campaign — as well as direct sales opportunities — are aimed at addressing that.

Gordon says HCGA is also working with partners and Congressmember Jared Huffman on legislation known as the Ship Act that, conditioned on federal legalization, would pave the way to allowing small farmers to ship their cannabis directly to consumers, noting the practice has been a boon for the wine industry.

For his part, Humboldt County Sheriff William Honsal, who endorsed the No on Measure A campaign, says he believes Humboldt has "the best regulated marijuana in the state" and regulation has seen a drastic reduction in unlicensed grows. Asked what changes he'd like to see, he said the county "needs to collect the taxes" it has imposed on cannabis and he'd like to see the state increase penalties on illicit grows, noting organized crime "has crept into" some counties to set them up because of the low risk of consequences. But as far as local regulations, Honsal says he generally likes what's in place.

Madrone, who didn't take a stance on Measure A, says he feels there's room for improvement on almost all levels. He also strongly supports incentives — like tax breaks — for farms that do right things, from increasing water storage to using renewable energy to improving roads.

"I think cannabis is way over regulated," he says. "I mean, we don't even regulate our food as intensively. Let me just say that I'm not one who is a big fan of sticks and hammers, although I recognize they are part of the tools in the toolbox. But if you have good carrots — if you have good incentives — you only need to use those tools on a few people. ... If you incentivize the good behaviors with enough financial reward, the vast majority of people are going to stop at the stop signs, are going to cover their greenhouses at night."

But Madrone agrees the success of Humboldt County cannabis ultimately will live and die with education and marketing, getting consumers to place value on it as a high-quality product. Without any marketing, Humboldt cannabis was once internationally known as the best flower on the planet, he says. The challenge now is that the market is flooded with cheap product, while consumers have been taught that THC-content is the primary determinant of quality.

DeLapp and Gordon say they are excited about opportunities to change that conversation moving forward, about using appellation designations to tell stories of place, while talking about terroir, about getting local consumers to prioritize local products, and about putting farmers in front of their customers, allowing them to showcase the love and care they put into them.

Having successfully fought to keep the heartbeat of local cannabis from arresting, their efforts now turn to amplifying it to a pitch that can be heard throughout the state.

Editor's note: This story was updated from a previous version to correct an error regarding the potential impact of Assembly Bill 1111. The Journal regrets the error.

Thadeus Greenson (he/him) is the Journal's news editor. Reach him at (707) 442-1400, extension 321, or [email protected].