Wine Country fires devastate the California cannabis economy

California’s $21 billion cannabis economy is reeling from likely more than a billion dollars in crop losses related to a series of deadly wildfires that swept through the cultivation...

California’s $21 billion cannabis economy is reeling from likely more than a billion dollars in crop losses related to a series of deadly wildfires that swept through the cultivation heartlands of Mendocino, Sonoma, Napa and Solano counties this week.

Up to one-third of the annual outdoor cannabis crop in those regions could be destroyed or significantly damaged as 22 wildfires continue to burn in California. The fires have torched more than 170,000 acres and thousands of homes, farms and businesses, and taken the lives of at least 31 people. Hundreds remain missing.

“We’ve been watching the community come apart at the seams,” said Kevin Jodrey, who runs an annual cannabis competition called the Golden Tarp in Humboldt County. In conversations with wholesale cannabis buyers across the state, double digit percentages of the harvest are assumed lost.

The entire supply chain has been damaged as well, because the fires swept through not only cannabis gardens but the properties of seed breeders and those who make and sell cuttings, as well as cannabis oil extraction facilities, manufacturers and distributors.

The fires could not have come at a worse time for producers or consumers. The annual outdoor harvest season was in full swing, and many farmers intended to pick their crops through the end of the month.

Hezekiah Allen, executive director of the California Growers Association, said the fires in Sonoma and Mendocino counties have caused “the worst year on record for California’s growers.”

Several dozen CGA members have lost their entire farms in the blazes burning near the city of Santa Rosa, further north in Redwood Valley and beyond. “This is going to leave a deep scar,” Allen said.

Some of the worst blazes struck the marijuana commerce epicenters of Sonoma and Mendocino counties and cut across the industry, torching some the largest, most prestigious operators in the state’s cannabis economy, said Ben Bradley, operations director at the California Cannabis Industry Association. Bradley reported dozens of CCIA members have lost crops and homes.

According to county surveys, the number of cannabis gardens in Sonoma County might be anywhere from 3,000 to 9,000. Revenues from cannabis are unknown but likely total in the hundreds of millions of dollars annually in the county. Santa Rosa has emerged as the epicenter of the modern legal pot economy in California. Wildfire ravaged the city Monday night and burned all week long, blackening the sky and damaging any outdoor crops that survived the flames.

“We have a lot of people who have lost their farms in the last 36 hours, and their homes,” said Tawnie Logan, chair of the Sonoma County Growers Alliance on Tuesday. “We’ve got about 30 percent of our farm still sitting out there —just covered. It’s going to be tough. All of our product is covered in ash and soot and billows of smoke.”

The smoke destroys the value of the crop and makes it more susceptible to disease, leading to unhealthy levels of mold, mildew and fungus.

“Especially when it’s ripe — I can tell you from personal experience, wildfire definitely will make your cannabis have a smoky flavor to it, just like wine,” Kristin Nevedal, executive director of the International Cannabis Farmers Association, based in the Humboldt County town of Garberville, said in a September interview.

Further north in Mendocino County, the cultivation-rich Redwood Valley remained on fire Thursday, with 32,100 acres burned and five percent of the fire’s perimeter contained. Redwood Valley is a hotbed of multigenerational, mom-and-pop, craft cannabis cultivators. Thousands of them live and work gardens in the rugged, remote hills. The Redwood Complex Fire has downed communications systems and cut off residents from the outside world.

“Some of our neighbors up the road didn’t make it out in time,” reported Redwood Valley grower MendoDope on its Instagram page.

“So many people have their livelihoods where they live. Here, people lost everything — homes and livelihoods — in one fell swoop,” said Amanda Reiman, a Redwood Valley resident who is the vice president of outreach for the cannabis company Flow Kana.

The damage is compounded by the cannabis industry’s legal status: Though sanctioned by California and other states, it remains an illegal drug under federal rules. Unlike wineries, cannabis farmers generally cannot obtain crop or fire insurance. Those that do find insurance pay exorbitant rates for skimpy coverage. Cannabis farmers will not be eligible for federal disaster relief.

Logan saw a $2 million crop in a Santa Rosa greenhouse that was reduced to ash Sunday night. “There’s no way for them to recover the millions in anticipated revenue they just lost,” she said. “It’s gone. It’s ashes.”

“I had one conversation today where the family was in tears, saying, ‘We don’t know how we’re going to make it to January, let alone next planting season,’” Allen said.

Many farms also have all-cash savings on-site, because of banking limitations on cannabis commerce, said Josh Drayton, communications director for the CCIA. “I know we definitely have multiple members that have lost their homes and have lost their savings.”

The entire cannabis industry was also in the process of seeking local state licensing to enter the recreational-use market in 2018. They had been spending tens and hundreds of thousands of dollars for things like water permits and leases on warehouse space.

“Folks are out their entire life savings over the last few years to get to this point,” said Allen.

Leading San Francisco dispensary SPARC was preparing to harvest its outdoor crop Tuesday. Early Monday morning, SPARC’s farm in Glen Ellen sustained major damage from the Nuns Fire, director Erich Pearson said. “The whole thing was on fire,” he said.

Wednesday he said, “There’s no fuel left. You see a stump burning and there’s nothing around it, so we leave it,” he said.

A noted cannabis breeder and seed seller who goes by the name of Subcool reported Tuesday losing his home, seedstock and source plants used to make cuttings, called “mothers.”

Subcol’s colleague reported on Instagram that he refused to leave his farm. “With flames soaring in the air he yelled, ‘Come get me. Here I am.’” Sheriffs reportedly had to escort him away.

Another farm, Sonoma County Cannabis Company, sustained major losses, according to multiple reports. “There are no words right now to describe the loss, the heart break and the trauma that our beloved home and community is going through,” the company posted to its Instagram account. “We are trying to save what we can.”

Major Santa Rosa cannabis manufacturer CannaCraft closed its 110-employee business Monday but reopened Tuesday with a skeleton crew working amid “awful” air quality, said spokeswoman Kial Long. All employees are accounted for, but losses have been felt companywide.

“We have no employees that were not impacted in some way or another,” Long said. “A lot of family, a lot of friends and a few employees did lose their homes.”

CannaCraft pledged to give $40,000 worth of medicine to affected patients, donate a portion of sales proceeds to benefit Red Cross relief efforts in the area, and is turning its Santa Rosa facility into an evacuation center for the weekend.

Although many operators are still in danger, relief efforts have begun across the state. Chief among them, the California Growers Association is coordinating donations to Mendocino County relief.

Losses are expected to climb as the fires continue to rage through the weekend.

“This isn’t going to stop until the rains come down,” said Jodrey.



Source: San Francisco Chronicle cannabis editor. 

Featured Image: Reuters/Rory Carroll

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