SEE ALSOMatt in the Middle: Humboldt Honeys With Dope Douchebags


[Disclaimer: I am a board member of the Redway Community Services District and the Redwood Region Economic Development Commission (RREDC), but these views are entirely my own.]

Cannabis plays a central role in our county’s economy. Numbers are hard to come by, and I laud the Humboldt Institute for Interdisciplinary Marijuana Research for their efforts. The county, however, refuses to even officially acknowledge pot’s existence for planning purposes. During an economic development strategy presentation at RREDC, I asked why cannabis was not even mentioned. I was told that some federal funding had been received and discussing it would equal promoting it, which we could not do with said funds. We did not even mention that no business plan assuming a pool of low wage reliable workers will suffice here because many of those workers will soon leave for better wages in the industry, whether on the production side or involved with things like soil, supplies, services and real estate. Sheriff Tom Allman of Mendocino County is honest enough to publicly estimate that half of his constituents gain some portion of their income from the herb, and I think he only meant growing, trimming and selling. Hiding our heads in the sand is not viable public policy.

Humboldt County is world-famous for its cannabis. No other place on earth has the marketing advantage we do. A plant grown in Monterey County won the Emerald Cup this year, proving that great weed can be grown elsewhere, but people associate it with here. Last year, in Seoul, South Korea — hardly a stoner place — I saw, at different times over three weeks, two youths with Humboldt sweatshirts on. I saw no other American county feted there, although I did see both California and New York City attire worn. The last time I was in D.C. I saw some weed that was advertised as being from Humboldt. It was just OK, and would not have been easily sold to any broker here. A knowledgeable friend said it probably came from West Virginia. I recently read about local high school students visiting the San Francisco Opera for a dress rehearsal that was also attended by many other high schools’ students. The public address system highlighted the farthest traveling students as being from “South Fork High in Humboldt County,” and the other youths all cheered heartily. I suspect they were not impressed so much by a school traveling over 200 miles as they were celebrating the very existence of our county.

Cannabis is on its way to full legalization. Wholesale prices have fallen to about a quarter of what they were before Prop. 215, as production has exploded. While we have many elements of a strong diversified regional economy such as foods, tourism, education, light industry, forestry and people wanting to live here, we cannot afford to neglect our largest industry. While there are problems with it, most are side effects of its underground nature. Legality and sensible regulation will solve those.

Drops in price are a reflection of the diminished legal risk here and the related overproduction. People complain that middle men are making “all” the profit, but they are the ones taking the risk. The only local weed “criminal” I know in jail is in Idaho for transporting. Some say that with legalization coming, smoking cannabis will sell for $25 a pound, slightly more than chopped raw Chinese hemp bast fiber costs now. High-quality cannabis, however, takes skill and attention to grow and process.

Perhaps giant farms in the Central Valley will produce huge crops suitable for concentrates, edibles or hemp. Lots of wine grapes and raisins are grown, and even some good wines are made, in the Sacramento and San Joaquin valleys, but everybody knows that Napa has the skill and name and sells the high value product. I suspect that Uruguay’s $1 an ounce retail scheme will entail both a huge government subsidy to run, and such poor quality smoke being produced that the legality of possession and use will enable a more expensive gray market to thrive. A huge number of people will always be willing to pay $25 for an eighth of an ounce of good weed. People grow well indoors everywhere, but given excellent quality and reasonable prices, most educated consumers prefer naturally sun-grown cannabis. Our mission is to keep them buying it from us.

With that in mind I propose the following scenario, modeled loosely on U.S. tobacco production. In my suggestions to the county back when they were asking, I included some measures in an attempt to protect the county from federal outrage, but for now I am assuming the feds will soon desire and honor regulation.

The production end is designed to spread the wealth and restrict overproduction. There is a permit for up to 99 plants per parcel of at least 40 acres, fewer for smaller ones down to 16 on a 1/2 acre. One permit per parcel and only an adult natural (non-corporate) person or group of them can get one. A person can be party to, or maintain any beneficial interest in, including rental income from, only one permit or permitted parcel. Numbered zip ties would be issued to be attached before July. Allowing 300 seed starts to allow for culling and males would be reasonable. You must prove availability of “adequate” water — I suggest, based on surveys I conducted a few years ago, 300 gallons of supply for every zip tie issued or per pound produced in the latest active year of the permit, if there was one. Changing state laws to allow for longer storage of winter rains would be very desirable. Rules to facilitate breeding programs and seed or clone production need to be formulated too, recognizing the need for huge numbers of plants and the risk of pollenating nearby crops. Legal organic certification would be great. 

The distribution end: All permitted growers bring their lots to a county-run or privately licensed testing center. There, the product — whether bud, trim, concentrate or frozen juice – is tested for mold spoors (no failing, just the number detected so buyers know), cannabinoid content and hopefully cannabinoid and terpene profiles. Competing testing centers could offer different fees, tests or methodologies. Then it is weighed. The cannabinoid content and weight would be used to determine an excise tax, say $200 per pound at 20% content, $150 at 15% (i.e.. $10 per percent). Then the grower, assuming they have a resale license, could take it back with documentation paying the fee and excise tax, to sell to their customers, or they leave it, incurring another fee, with a minimum bid if they so specify, for that day’s or week’s auction at a site run by the county or perhaps at any licensed bourse. At auction, buyers (anyone with a resale license, including corporations) could read, look, smell and bid. Bakers and concentrate makers could buy trim or even leaf. Buyers pay the house ,who pay the grower – minus fees and excise. A paper trail exists proving Humboldt terroir. If it doesn’t sell after some number of auctions it’s minimum bid is lowered, or it is stored for later auctions (probably with a fee for nitrogen packing), returned to the producer for excise and fees, or “destroyed”, which could be a mechanism for suppling medicine to the indigent. Counties design their own retail regulations, including ones for seeds and clones. The voters of the state, counties and cities set any additional sales taxes (by law, 2/3 majority to pass).

Assuming $25 retail eighths including $5 in sales tax, a 100% retail markup and $300 in testing, handling and excise means $980 per pound to the producer. That is less than most people get now (if they don’t still have some of last year’s), but still fair for skilled agricultural work and a good living, especially if you can consistently grow the fabled five-pound plant. If yours is good enough to fetch $50 an eighth, you are going to earn $1960 a pound if consumers have a relatively free market of retailers to choose from. 

Should people who grow and consume their own need to bother with all this? No. Who gets the excise tax? Me! Fifty parcels off Thomas Road times 100 plants times 2 pounds times $200 = $2 million per year, with which I would properly pave it and run a shuttle on it. (Joke.)

Are there different ways of doing everything I have suggested? Of course. Continue the conversation. Might some people have extra hidden plants for illicit sales? Yes, although a free market for consumers and sensible regulation would limit that. Might some retailed product be smuggled to a more restrictive state? Possibly, if it is less expensive than the black market product which is currently flooding the country from everywhere. If so, when Iowan authorities interdict cannabis with California retail taxes paid on it, they will choose regulation too and our market will increase.

Michale McKaskle sits on the board of the Redway Community Services District and the Redwood Region Economic Development Corporation.