Pubdate: Sun, 21 Sep 2014
Source: Willits News (CA)
Copyright: 2014 Willits News
Contact:  http://www.willitsnews.com/
Details: http://www.mapinc.org/media/4085
Authors: Will Houston and Juniper Rose

HUMBOLDT'S MARIJUANA INDUSTRY: BOOM OR BUST?

Local Leaders Speak on County's Future in Branding, Legalization, Medical Use

A recently released report states California's legal cannabis 
industry is expected grow by billions of dollars in five years, and 
is set to become a golden economic driver for the Golden State should 
the industry become legalized in 2016. Within Humboldt, already known 
worldwide as a cannabis capital, many locals are concerned about 
whether the rural county will be lead the legalization charge to 
become the Napa Valley of the cannabis industry or if the industry 
will be exported to other areas in the state.

Sitting at a table in Arcata's Humboldt Patient Resource Center as 
patients purchase strains of medical cannabis grown at the location, 
general manager Bryan Willkomm said the idea of losing the cannabis 
industry to outside forces is something on the minds of many.

"There are rumors that you have cigarette companies branding Humboldt 
County names of strains - those are the types of concerns that many 
individuals in Humboldt County have had," Willkomm said. "That the 
years of work in both the medical and potentially black market 
industry in cannabis being snatched up by the larger corporations at 
their benefit, and repatriating that wealth to a multinational 
corporation versus benefitting the community and workers in Humboldt County."

The numbers

The legal pot business in the United States, including both the newly 
legalized retail operations in Washington and Colorado and the 
medical-marijuana use now allowed in California and 22 other states, 
is expected to grow this year to $2.6 billion from $1.5 billion in 
2013, according to the ArcView Group, a San Francisco-based marijuana 
research and investment firm. In five years, that number could swell 
to more than $10 billion.

Although the state in 1996 became the first in the nation to legalize 
pot for medicinal reasons with the passage of Proposition 215, 
California has yet to approve it for the overall adult population, or 
so-called "adult use." Despite that, it has the largest pot market in 
the nation, according to a widely referenced report last year by ArcView.

"California remains the largest state market at $980 million, even 
without Adult Use regulations," the report states. And "once Adult 
Use is adopted - which is likely by 2017 - the total California 
market is projected to increase dramatically."

Within Humboldt, the total amount of revenue generated in the county 
from marijuana is unknown because there is no concrete data, said 
Humboldt State University Institute for Interdisciplinary Marijuana 
Research co-director Erik Eschker.

"The guesses that I have seen range from 10 to 25 percent of the 
local economy," he said. "Those numbers are believable. ... This is 
not a question that cannot be answered."

Eschker said the only data collected giving any sense of the scale of 
the local industry was a survey conducted by the institute on 
Humboldt State University students earlier this year. In the survey, 
one out of six students stated they had worked in the marijuana industry.

"It strikes me as a very large number, and I think that you would 
find for Humboldt County also a surprisingly large number compared to 
other regions in the state," he said, adding that the data only 
represents a subset of individuals in the local area.

Others, like Wonderland Nursery business manager and California 
Cannabis Voice Humboldt treasurer Luke Bruner, estimated the local 
revenue generated by the cannabis industry is much higher - up to 80 
percent of the local economy.

"I think in 2014 our number is $4 billion a year," he said.

A 2011 study conducted by Jennifer Budwig as part of her banking 
thesis also had a billion-dollar estimate, predicting that $2.6 
billion in gross revenue was collected by growers in 2010, with about 
$415 million in marijuana money circulating through Humboldt County annually.

Jason Beaver, development director of California Cannabis Voice 
Humboldt, said the county's geography, climate and history have 
attracted the "cannabis titans" to the area, but the money generated 
from these knowledgable growers is not staying in the county. The 
recently formed political action committee represents growers and 
medical marijuana patients.

"It's running out of our county," Beaver said. "It's going everywhere 
else, all over of the world. ... It's already being taken away from 
us. We have got to grab it and hold on to it and stamp it and make it 
ours. And we have to do it in a pretty short timeline."

Branding Humboldt County

If marijuana is legalized statewide, Robert Sutherland of the 
Humboldt-Mendocino Marijuana Advocacy Project said big producers will 
inevitably move in and soak up the mass marijuana market.

"We have to be prepared for that," Sutherland said. "I don't think 
there is anything we can do about that."

However, he said, if Humboldt could keep a high-priced, high-quality 
market if it establishes standards and a way to brand and certify the product.

"There has to be some way of regulating how that is done," Sutherland 
said. "We need to develop our niche market as developing a 
specialized, high-quality product."

The Humboldt County Board of Supervisors is trying to develop 
regulation that will be necessary for the needs of the community but 
not hurt the economy, 5th District Supervisor Ryan Sundberg said.

"Most of us all know that marijuana is huge part of our economy, and 
many business depend upon that," he said. "It is what it is."

Sundberg, who sits on the county's marijuana subcommittee with 3rd 
District Supervisor Mark Lovelace, said they have tried to be mindful of that.

"For myself, I want it regulated and taxed," he said. "I believe it 
is not going away, and we can either come up with smart policies and 
rules and have our economy here drive off of it, or we can put our 
head in the sand and have someone else drive off it."

Agreeing on statewide laws would make it cleaner, safer and possibly 
more economical, Sundberg said.

"It can be an industry like alcohol - there is Kentucky bourbon, 
there is Humboldt marijuana," he said.

In January, the board placed a moratorium on permitting new 
dispensaries or collectives in unincorporated areas until more 
comprehensive regulations could be drafted. Supervisors also passed 
restrictions on indoor medical marijuana cultivation and are 
considering an ordinance to regulate outdoor medical marijuana cultivation.

Eschker said Humboldt County's future in the marijuana industry is 
not in the dispensary market.

"Our comparative advantage is in the growing of marijuana," he said. 
"All of this depends on how the regulations are written."

As to how the medical marijuana market will handle adult-use 
legalization, Willkomm said to look to Colorado.

"Our target is a little more unique than large-scale cultivation 
practices where strict volume is the priority," he said. "In others' 
experiences, when we went out to Colorado to speak with managers that 
moved to recreational from medicinal, at the beginning of the 
legalization stage, recreational use had a massive increase in 
demand. What that resulted in was a drop in quality in the medicine. 
That drop in quality was most felt by medical patients who were 
relying on a certain cannabinoid profile to get the benefited effect."

 From mom and pop "bud and breakfasts," artisanal edibles, locally 
owned farms and environmentally friendly practices, Bruner said the 
county has an opportunity to utilize what is currently an informal 
brand to its advantage.

"Humboldt County gets $350 million a year in tourism," he said. "Napa 
County has $3.1 billion. I think we can be Napa's equal. Just like 
they have 17,500 tourism-related jobs, I think we can have 17,500 
tourism-related jobs. People from all around the world are going to 
want to come here."

Fearing that a potential statewide legalization measure will favor 
larger "mega-grows" that cut smaller farmers out of the cannabis 
equation, California Cannabis Voice Humboldt is scheduled to hold a 
stakeholders meeting at the Wharfinger Building in Eureka on Oct. 22 
to draft a local ordinance laying out agricultural regulations unique 
to the area and protecting the area from corporations that attempt to 
use Humboldt County as a marketing tool, Beaver said.

"We don't have time to deal with what color the door is painted, but 
we do have time to agree on basic principles that protect and empower 
Humboldt County as a global leader in cannabis production," he said. 
"We're not going to stop until we have signatures, ink on paper and 
then a party afterwards."

Emerald Growers Association Executive Director Hezekiah Allen said 
the key to success will be coming together as a community to 
acknowledge that marijuana is an economic driver for the region, work 
through differences and come up with solutions that will keep 
Humboldt County on the leading edge.

"At the end of the day there is definitely a place for the region in 
the legalized economy, and that is a place of leadership," Allen 
said. "Even though we are rural, disorganized and way up there on the 
North Coast, we need to make sure our voice doesn't get lost."

San Jose Mercury News staff writer Patrick May contributed to this article.
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MAP posted-by: Jay Bergstrom