Making Sure the End of Cannabis Prohibition Benefits the Small Farmer

At the Willits, California Food Bank, a 31-year-old cannabis farmer we’ll call Mark was energetically ticking off the community service hours he’d earned for growing our nation’s number-one cash crop. I watched for a few minutes as he passed bags full of apples, cheese and surplus generic sponge cake to a Mendocino County mom. I asked Mark what he thought about the approaching end of federal cannabis prohibition. He acknowledged that it was imminent, but was deeply wary of it. “It’ll be the end of the small farmer,” he told me. “Foks’ll be buying packages of joints made by Coors or Marlboro.”

Why does Mark, like many if not most of today’s American black-market cannabis farmers, dread the aboveground acceptance of his industry? Why did the voters in the Emerald Triangle cannabis farming counties of Mendocino (by 6%) and Humboldt (8%) vote against California’s Proposition 19 in 2010, which would have legalized cannabis?

The answer has as much to do with simple accounting as the more common outsider assumption: that farmers fear the price drops that come when a prohibitionary economy dissolves (though this is certainly part of the story). When, in three generations of farming, your family has never had to pay taxes, record payroll or meet building code, let alone meet a customer (the Emerald Triangle has an entire caste of middlemen and women who broker wholesale deals, so the farmer doesn’t have to leave the farm), the prospect of coming aboveground -- and dealing with the same red tape every other industry does -- can be terrifying.

Some of these farmers, like all successful small-business owners in any industry, resist change in knee-jerk fashion by distributing worst-case scenarios the way some people pass around business cards. “Look at tobacco," Mark told me at the Food Bank. "They’ve made the paperwork crazy complicated so only giant corporate farmers can afford to grow it commercially.”

He’s actually correct. Section 40 of Title 27 of the Alcohol and Tobacco Tax and Trade Bureau’s regulations has 534 subsections. You need a corporate lawyer on call to endure this document without a migraine. The system favors big producers, and Big Tobacco is at least paying attention to federal drug law: NPR has reported that Philip Morris trademarked the brand “Marley” at the height of Just Say No in 1983 (though this doesn’t turn up at the United States Patent and Trademark site, and the company is mum). And Dan Mitchell reported in Fortune that tobacco company Brown & Williamson “enthusiastically” advised, in a 1970s internal report, that the company start viewing marijuana as "an alternative product line.”

Regardless of corporate boardroom strategy, the stacked deck at the mass production level is explicitly why the cultivators of the Emerald Growers Association (EGA), a cannabis farmer trade group based in Northern California, prefer describing the “craft brew” model for the post-prohibition cannabis economy. In a world of Coors, these farmers plan to provide Fat Tire Ale. “We’re not afraid of what might be stocked next to cheap beer and cigarettes at the corner store,” says Tomas Balogh, EGA board member. “Let’s remember that American craft beer was nearly an $8 billion market in the U.S. last year.”

So when people ask him if globalized corporate models or small farming community-based models will emerge when the drug war ends here in a few years, Balogh says, “Both.”

His point is that of course major players are going to enter the fray when we’re talking about what is already a $35-billion-a-year crop in the U.S., greater than the combined value of corn and wheat. Although the end of cannabis prohibition will almost certainly cause short-term wholesale price drops, what Balogh says to jittery farmers like Mark is, “even if your worst, most paranoid fears about modern corporate ethics are correct, there is still a lucrative (and expanding) niche for top-shelf, organically grown cannabis like the Emerald Triangle provides.”

If it’s done right. The same shopper who today looks for local broccoli at her food co-op is going to demand organic techniques in her morning cannabis health shake. If a black-market farmer is simply churning out quick turnaround, pesticide-heavy, indoor-grown popcorn buds to pay the mortgage, that farmer is going to lose out to Coors-style mass-produced cannabis, because he’s essentially growing a Coors-quality product already. But if the three-generation knowledge base that caused Michael Pollan to call cannabis cultivators “the best farmers of my generation” is put to use in the cause of long-term product quality and local community health, small-scale (maybe we can call it “microbud”) cultivators will help the region become an internationally recognized paragon of consistent top-shelf production. That is called a brand.

“The best part is farmers can keep the industry benefiting their local economy,” Balogh told me from his own Mendocino County farm in 2011.

Indeed, local farmers already hold meetings (I’ve attended several) in which they discuss the fact that the economy of cannabis cultivation communities can expand beyond the already considerable value of the psychoactive flower. To give one example, the Bavarian community of Feldheim, Germany has become entirely energy independent (while nearly eliminating local unemployment) by generating municipal power generated from the unused stalks from the rural community’s farms.

When cannabis comes aboveground, its cultivators are likewise in prime position to benefit from fermenting or gasifying stalks that would otherwise be compost. Where would funding for such planet-saving entrepreneurialism come from? Perhaps from the 21st-century Homesteading Act that fifth-generation Colorado rancher Michael Bowman and others are proposing: these would be micro-grants for micro-intensive, local community-enriching farming projects. (Social/medicinal cannabis is a specialty crop requiring a great deal of farmer attention to every plant. For industrial cannabis in places like North Dakota and Kentucky, the grants might be on a larger scale, reflecting larger farming operations.)

Such plans are very much in the blackboard stage. After all, cannabis isn’t legal yet. That can throw up roadblocks in the federal grant application process. Yet the discussions continue. In the Emerald Triangle, farmers have brainstormed about cost-saving techniques for the local industry that include centralized bud-trimming facilities, warehousing and quality testing services. These will bring local employment, as will “bud-and-breakfast” value-added tourism. You can’t talk to an EGA farmer without hearing how Mendocino and Humboldt counties are going to do for cannabis “what Napa did for wine.” (Napa did $11 billion just in tourism business in 2011.)

Get ready for cannabis tincture massages and reggae-accompanied tasting tours. And not just in California: Colorado and Washington, having already legalized adult use of cannabis, have obvious headstarts in the tourism arena (it helps when guests aren’t going to get arrested in their bungalows, and operators don’t need raid insurance) and regional cannabis heavies like Kentucky and Hawaii are sure to see bud-and-breakfasts before the decade is out.

Just in case you don’t think the tourism sector is aware of all this, here’s what Jennifer Rudolph, spokesperson for Colorado Ski Country USA, a trade association that represents 21 Colorado resorts, told the Associated Press three days after that state legalized cannabis for adult social use, when asked if vaporizer-friendly suites were around the corner at Aspen and Vail: "There's a lot that remains to be seen," Rudolph said with a chuckle. “I guess you could say we're waiting for the smoke to clear."

Danger, though, lurks in other places besides Big Tobacco and Alcohol for the small post-drug war cannabis farmer.

I learned this when a marketing vice-president at a startup biotech firm asked me “whether cannabinoids like CBD can be synthesized in ingestible form.” (CBD is a non-psychoactive component of the cannabis plant that in multiple mainstream studies – including one from Israel last week -- is showing promising medical benefits ranging from health maintenance to pain relief to tumor reduction.) I realized the answer to this fellow’s question, if one is coming from a for-profit pharmaceutical mindset, was a lucrative one. “Lives are at stake, go for it, dude!” I told the would-be legal drug provider. “Always remembering sustainable principles and the fact that the research into the interplay of 90 cannabinoids is very young.” As his face clouded and I could see him wondering how to figure that into an SEC, let alone an FDA filing, I added, “And of course no one should ever be kept from access to the whole plant if that’s their choice.”

In other words, instead of joints at the corner store, some folks who only know the pop-a-pill model of healthcare are susceptible to peddlers of concentrated non-organic versions of cannabis if their use is explicitly medical or for health maintenance. Ask a traditional Chinese medicine practitioner -- whose tradition has been using cannabis as just another herbal remedy for everything from easing labor pains to aiding sleep for 3,000 years -- whether the intense concentration of one element of the medicinal plant is likely to be effective and she’ll bust out laughing.

When I first met Mark at the Willits Food Bank, he scoffed at the idea of cannabis farmers organizing and branding themselves with an “Emerald Certified” label in preparation for the time when their flowers are as legal as celery. But when I ran into him a few months later, he asked me for the EGA’s Web site.

And this is the climate I find in Emerald Triangle communities these days: the veneer of resistance to hanging up the outlaw farmer hats is a thin one. You know when 100 third-generation outlaws sing “Happy Birthday” to a sergeant in the local Sheriff’s Department that they believe in the effort to legitimize their multi-billion-dollar industry. This is something I witnessed not too long ago in Willits. The law officer was the administrator for Mendocino County’s landmark (and wildly successful, unless you count the federal raids that shut it down, for now) program for permitting its sustainable farmers.

The first few years of federal drug peace will be the best of times and the worst of times for the independent cannabis farmer. Just as the end of alcohol Prohibition put bootleggers out of business, the question of who will snatch the cannabis market when the cartels are pulled out of the equation is ultimately up to America’s 100 million cannabis consumers. In places like the Emerald Triangle, local communities are asking you to buy locally produced, farmer-owned, sustainably grown, uniformly tested flowers for your next Super Bowl dip.


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