This is the first installment in a two-part series that will highlight views for Humboldt’s best path forward in the cannabis industry. Regardless of your take on cannabis as a profession, our area is heavily reliant on farming revenues and we have a collective interest in preserving this important driver of economic prosperity in our region.

While I continue to believe that cultivating at scale offers the most viable long-term play, this series will focus on alternatives that are more palatable given our area’s anti-corporate, anti-development bias.

The Backdrop

As predicted, this year has proven challenging for cannabis industry operators. After a brief window of modest prices, offers for bulk deps are now around $400 to $600 a pound, with some buyers claiming to have solid flow in the threes. Packaged products continue to provide better value, but more and more stories of delayed payment or failure to pay at the dispensary level are swirling around. Cultivation licenses are lapsing or laying fallow, ancillary business revenues are down, and margins are thin across the supply chain.

Complicating things further is that many farms in the Emerald Triangle planted late this year, not wanting to risk a bad first run in the unpredictable spring weather. Folks are now coming to market with the year’s first harvest and are selling into a highly competitive landscape with ample supply and falling prices.

While California continues to boast of modest unemployment and reasonable job growth, inflation is clipping along above nine percent and the U.S. economy shrank by 1.6% in the first quarter. Most economists believe GDP will be negative in the second quarter, officially indicating a recession is upon us. Recessions are known for reduced consumption and falling prices for consumer goods, neither of which bode well for cannabis or Humboldt more broadly.

I’ve been talking to folks throughout the state and back east, and all believe sun-grown flower from California will be a hit in a national and global context. The problem is not many of us will be able to hang on long enough to see that come to fruition. Corporate players, like in food and beverage, will pile onto the organic bandwagon and mop up most of that market too, but the opportunity to engage hundreds of millions of global consumers would be a welcome development for small family farms nonetheless.

Aside from allowing cultivation at scale and radically boosting farm yields and quality through cultivar selection, shaping plants, coring and bottoming aggressively, foliar nutrient and mineral delivery, artful stress, and a proper drying and curing program, I believe two options offer Humboldt a leg up economically. A robust microbusiness climate and a robust cannabis tourism program could help Humboldt stay relevant in the space and buy us time while national and global markets open up.

Let’s dive into the concept of the microbusiness opportunity. I’ll follow up next time with a look at cannabis tourism, which is gaining enormous traction out there.

Microbusiness License

Here in California, one can obtain a microbusiness license that allows small operators to achieve vertical integration – the crown jewel of the cannabis industry that corporate and multi-state operators implement to diversify revenue and improve margins. In a vertically integrated structure, one can cultivate, manufacture, distribute, and retail. Cultivation is limited to less than 10,000 square feet, which conveniently is the size of many commercial operations here in Humboldt.

Why does this make sense?

Because in a world of declining margins and profitability, the ability to create multiple revenue streams can be a life saver.

I spoke to a larger operator in NorCal recently who claimed each segment of the vertical was providing a 3-5% margin. For a small farm growing 1,000 pounds, a 3% margin on cannabis sales is unacceptably low and will lead to closure. 12 to 20% margins on larger gross revenue that includes cultivation, distribution, manufacturing, and retail can help family farms stay in the game.

Additionally, microbusinesses could help other local farmers sell flower and create value-added products like High Terpene Full Spectrum Extracts, which have high demand in the marketplace. Collaboration could flourish and we could further exploit niche markets for some product lines.

As MOCA Humboldt recently showed with a strong performance at the State Fair, microbusinesses can shine in the areas of quality, innovation, and brand recognition. MOCA brought home several awards from the recent competition and is receiving a fair amount of press – a well-deserved and welcome development for any high-performing small operator. I read about their success from a third party on LinkedIn, one of the very best cannabis networking platforms in existence. That type of exposure not only creates brand awareness but can open doors and create profitable business relationships as well.

Unfortunately, the regulations make it challenging to become a cannabis microbusiness. State fees are somewhat stiff at $15,000 up to $1.5 million in revenue and $42,000 a year from $1.5 to several million in sales. Finding a location can also be challenging as zoning restrictions severely limit available sites.

I would like to see Humboldt reduce barriers to entry and allow more microbusinesses to flourish. Lessening onerous zoning and other restrictions and allowing for on-farm operations would streamline the process, allow for greater participation in this niche, and allow for more collaboration among the local cannabis community. Friends could help friends manufacture products and get to market. Jobs would be created and Humboldt could maintain and solidify its position as a world-renowned legacy cannabis community.

Overall market dynamics remain challenging in Cali and microbusiness operators would need to focus on quality, consistency, efficiency, marketing, and creating lasting supply chain and consumer relationships to succeed. Additionally, operators would need to make infrastructure investments to enable operation in diverse business segments. Nonetheless, folks would have more of a fighting chance with diversification, and Humboldt’s near-term economic prospects would be meaningfully improved.

The recently proposed national legalization bill largely fell flat…skeptics cite the lack of a meaningful road show or substantial congressional press releases as evidence the bill will go nowhere. Biden opposes recreational cannabis, thus the move toward interstate commerce everyone was banking on seems to be stalling out. Biden has also failed to make good on his campaign promise of releasing non-violent cannabis offenders – disgraceful quite frankly. All told, industry insiders think it could be years before we have a fully functioning national market…not great news for the Emerald Triangle or small family farms.

Humboldt County regulators already stepped up once, granting operators relief from the cultivation tax. California followed suit and eliminated it as well. It’s time for Humboldt to take another step forward. Let’s stop hamstringing farmers and allow microbusinesses to flourish.

Aside from very niche distribution of packaged cannabis products or high-volume, ultra-low-cost outdoor production, making a living in the dirt – our county’s bread and butter – is increasingly out of reach for most.

A streamlined microbusiness process that encourages broader adoption and differentiates Humboldt in terms of product quality and innovation can help us stay relevant. Additionally, these micro cultivation, manufacturing, and retail operations could be a huge draw for cannabis tourists. I am personally fascinated with manufacturing, packaging, and farming operations, and tens of millions of consumers agree, which we will discuss next time.

Humboldt needs to hold on to its heritage…a rich, pioneering, and profitable history of cannabis cultivation and medicinal discovery. While our way of life is threatened, an operator-friendly regulatory environment coupled with love, dedication, innovation, differentiation, and collaboration can move us forward in unity and strength. Failure to do so puts our county strongly in the crosshairs of economic and social collapse.

Much love,



Jesse Duncan is a lifelong Humboldt County resident, a father of six, a retired financial advisor, and a full-time commercial cannabis grower. He is also the creator of NorCal Financial and Cannabis Consulting, a no-cost platform that helps small farmers improve their cultivation, business, and financial skills. Please check out his blog at, his Instagram at jesse_duncann, and connect with him on Linkedin.