Co-owners and employees of Emerald Family Farms, LLC, in 2016. | File photo by Andrew Goff.
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In the fall of 2016, the owners and operators of Emerald Family Farms, LLC, offered a tour of their operation near Berry Summit to demonstrate just how well prepared they were to succeed in California’s regulated commercial cannabis marketplace.
As we reported at the time, they’d organized an agricultural co-operative with nearly 100 growers, enlisted in the county’s brand new “track and trace” pilot program, signed a distribution deal and hired public accountants, trademark attorneys and marketing experts.
“Humboldt County is the Napa of cannabis,” co-owner and CEO Patrick Murphy told a reporter with PBS NewsHour later that year. “It is by far and away the largest production zone of high-quality cannabis in the world.”
Five and a half years later, with the Emerald Triangle’s legal cannabis market decimated under the weight of rampant over-production statewide, Emerald Family Farms has failed.
On Wednesday morning, the company’s assets — along with those of two related entities, Humboldt Health Care, LLC, and Emerald Family, LLC — are set to be auctioned off in Courtroom Four of the Humboldt County Courthouse.
The assets include:
52 acres of land in Willow Creek, including a 42-acre farm on the banks of the Trinity River with a 20,300-square-foot commercial building and an 890-square-foot office building,
property housing a 15,000-square-foot warehouse on Ericson Court in Arcata,
commercial cannabis licenses, including ones for cultivation, manufacturing and distribution, and
personal property including “maintenance materials, supplies, equipment, vehicles, inventory and tools, all intellectual property, and brand names.”
So what the hell happened? The picture’s not totally clear. Murphy could not be reached for comment. A former employee, who left the company a couple of years ago and signed a non-disclosure agreement, told the Outpost that he heard Murphy “skipped town and changed his number.”
But a good deal of information can be gleaned from a lawsuit filed last May against the Emerald Family companies by a Delaware-based cannabis equity firm called Pelorus Fund REIT, LLC.
According to the suit, Pelorus loaned Emerald Family Farms a whopping $18 million in 2021 and has never been repaid. (Messages left for the plaintiff’s attorneys were not returned by publication time.)
Lawyers for Emerald Family Farms actually issued a press release about the loan shortly after it went through. Published by Redheaded Blackbelt, the release said this influx of capital, along with a distribution deal with Cresco Labs, would “elevate EFF into one of California’s largest cultivators of high-end, sustainably grown cannabis products.”
As collateral for the loan, Emerald Family Farms put up virtually all of its assets, including a deed of trust encumbering its real estate along with security interest in everything from cash and property to patents, trademarks, products and proceeds, per the lawsuit.
Emerald Family Farms allowed a “Cultivation-Processor” cannabis license to expire in January 2022, and the following month the company defaulted on the loan by failing to make its full debt service payment.
“Borrowers did not pay any amounts to Plaintiff following the Notice of Default and in fact have not paid any amounts to Plaintiff since January 2022,” the complaint says. The unpaid balance is listed as “approximately $19,325,454.12.”
Pelorus sued Emerald Family Farms for judicial foreclosure, breach of contract and injunctive relief, seeking reimbursement of the loan plus interest, delinquent property taxes, attorneys’ fees and other costs.
Per the terms of the loan agreement, Pelorus Fund was entitled to appoint a receiver to take control of the assets Emerald Family Farms had put down as collateral. Wednesday’s auction of those assets is the result of that court-ordered receivership.
According to an auction listing online, the opening bid will be $3.5 million, with subsequent bids increasing in increments of $500,000. Making the sales pitch to potential buyers, the listing claims that the Willow Creek property’s weed entitlements make it “the largest cannabis facility in Humboldt County, and one of the largest cannabis facilities in the State of California.”
(For the record, the defaulted operations of Emerald Family Farms are practically mom-and-pop-sized compared to new commercial grows popping up to our south, such as this 134-acre outdoor farm set to open in Santa Barbara County.)
But the auction listing insists that our county’s name still rings out:
“Cannabis that is produced in Humboldt County is considered superior and world famous, is entitled to strong product branding protections, and commands a higher price than cannabis produced in Trinity County.”
On April 21, 2023 at approximately 12:05 p.m., officers with the Eureka Police
Department (EPD) were dispatched to the 2700 block of Fairfield Street to conduct a
welfare check on the occupants of the residence.
The reporting party stated they had
not been able to contact the occupants for several weeks.
Upon arrival, officers found
the house secured. Officers requested assistance from Humboldt Bay Fire and gained
access into the residence.
Inside the residence, officers found two deceased individuals.
EPD’s Criminal Investigations Unit was contacted and authored a search warrant for the
residence.
The search warrant was executed by EPD Detectives and the Humboldt
County Coroner’s Office. The search of the residence revealed no signs of suspicious
activity or foul play.
This is an ongoing investigation in conjunction with the Coroner’s Office. Anyone with
any information is asked to contact the Eureka Police Department at 707-441-4060.
On April 23, 2023 at approximately 11:30 p.m., the Eureka Police Department received
information of a traffic collision off the Eureka Waterfront Trail near the Tooby Road
parking area.
Upon arrival, officers located a Grey Ford van approximately 300 feet off
the trail in the field. The vehicle was occupied by one male driver, who was ejected from
the vehicle. The driver was declared deceased at the scene.
The initial investigation has revealed that for unknown reasons the vehicle had accessed
the area behind the gate located on Pound Road. The vehicle then drove to the trail
access and began traveling south on the trail at a high rate of speed.
The driver was unable
to navigate a turn at the end of the trail and the vehicle left the roadway, rolling numerous
times before coming to rest in the open field.
This is an ongoing investigation and anyone with information is asked to contact Officer
Jeremy Sollom at 707-441-4060 ext. 1315 or Officer Mark Sheldon at ext. 1339.
Press release from the Humboldt County Sheriff’s Office:
On April 22, 2023, at about 9:47 a.m., Humboldt County Sheriff’s deputies on patrol in the Eureka area conducted a suspicious vehicle investigation on the 3800 block of Little Fairfield Street.
Deputies contacted two occupants of the vehicle, 43-year-old Bryan Chester Maggio and 32-year-old Stormie Dawnn Moore. Moore was found to have outstanding warrants for her arrest and to be on CDCR Parole. During a search of Moore incident to arrest, deputies located over 7 grams of fentanyl.
HCSO K9 Deputy Yahztee was deployed to conduct a free air sniff of the vehicle and alerted to the odor of narcotics inside. During a search of the vehicle and Maggio, deputies located over 36 grams of fentanyl, drug paraphernalia, ammunition and a firearm with its serial number removed.
Maggio was arrested and booked into the Humboldt County Correctional Facility on charges of possession of a controlled substance for sales (HS 11351), felon in possession of a firearm (PC 29800(a)(1)), person prohibited in possession of ammunition (PC 30305(a)), possession of a short-barreled shotgun (PC 33215), possession of a firearm without a serial number (PC 24610) and tampering with the ID marks on a firearm (PC 23900).
Moore was arrested and transported to the Humboldt County Correctional Facility where she was cited and released on charges of possession of a narcotic drug (HS 11350), in addition to her warrants.
Anyone with information about this case or related criminal activity is encouraged to call the Humboldt County Sheriff’s Office at (707) 445-7251 or the Sheriff’s Office Crime Tip line at (707) 268-2539.
Press release from the Humboldt County Sheriff’s Office:
On April 23, 2023, at about 11:10 a.m., Humboldt County Sheriff’s deputies on patrol in the Blue Lake area observed a vehicle parked along Blue Lake Boulevard, blocking Buckley Road. The driver of the vehicle was observed to be passed out behind the wheel.
Deputies contacted the driver of the vehicle, 39-year-old James Melvin McLain, who initially provided deputies with a false name. Upon properly identifying McLain, deputies found that McLain had multiple outstanding warrants for his arrest. During a search of McLain and the vehicle incident to arrest, deputies located pepper spray and bear spray, burglary tools, drug paraphernalia and approximately 0.7 grams of methamphetamine.
McLain was arrested and booked into the Humboldt County Correctional Facility on charges of falsely impersonating another to make liable (PC 529(a)(3)), felon in possession of tear gas (PC 22810(a)), possession of burglary tools (PC 466), possession of a controlled substance (HS 11377(a)), possession of a controlled substance paraphernalia (HS 11364(a)), violation of probation and petty theft (PC 488).
Anyone with information about this case or related criminal activity is encouraged to call the Humboldt County Sheriff’s Office at (707) 445-7251 or the Sheriff’s Office Crime Tip line at (707) 268-2539.
Nordic Aquafarms is pleased to announce an exciting change that will build upon the success
with yellowtail kingfish (seriola lalandi) in Europe for our upcoming operations in Humboldt
County. Nordic Aquafarms California will also raise yellowtail kingfish. Nordic’s Hanstholm,
Denmark farm has raised the species since 2017 and its Fredrikstad farm is currently converting
from Atlantic Salmon to yellowtail kingfish.
Brenda Chandler, US CEO confirmed the benefits of the change with Nordic remaining a phased
project but anticipates the aquafarm will start smaller than what was projected for Atlantic
Salmon. Growth over time will be carefully considered. Nordic’s farm will still use seawater to
raise its fish but use less freshwater and energy. With yellowtail kingfish, it is a fully closed life
cycle, one that begins with in-house brood stock to produce fertilized eggs and grows fish to
harvest weight.
The US currently imports most of its yellowtail kingfish. The farm will augment domestic
demand and offset imports. Further, producing a healthy protein locally reduces the US balance
of trade deficit in seafood. “Both strategies are a solid part of the core values under which
Nordic Aquafarms operates”, Chandler said.
The Samoa facility will focus on yellowtail kingfish, which yields a firm-textured, light pink flesh
with an excellent clean, slightly sweet flavor. Yellowtail kingfish is a highly valued and popular
fish, excellent grilled or baked, and well-suited for sashimi, crudo, and ceviche. The market
demand for yellowtail kingfish saw strong growth both in Europe and the US in 2022 and is
expected to continue.
Across the country in Maine, Nordic Aquafarms has requested a stay of its permits for the
Belfast project. While the Maine project is paused, Nordic Aquafarms remains fully committed
and active in the permitting process with Humboldt County and the state of California, and we
look forward to breaking ground.
New housing construction in a neighborhood in Elk Grove on July 8, 2022. Photo by Rahul Lal, CalMatters.
For nearly a decade, lawmakers hoping to tackle the state’s housing crisis have faced a choice: win the support of the coalition that represents California’s construction unions — or watch those legislative aspirations sputter and die.
The State Building and Construction Trades Council, an umbrella group representing hundreds of thousands of bricklaying, pipefitting, bulldozing and foundation-laying union members across the state, has stood as a formidable political force that evengovernors have been forced to contend with.
That’s not just because the trades are reliable campaign contributors to California’s ruling Democrats — though they are. It’s also because they turn out motivated members, rarely shy away from a bare-knuckle political fight and reliably present a unified front against bills they aim to quash.
Last week, a few fissures appeared on that unified front.
Two affiliates of the trades council defected, throwing their weight behind a housing bill that the parent organization had been fighting for months. It’s a surprising and surprisingly public break that could help shift the political balance long defining California housing policy.
The bill in question would make permanent a 2017 state law that expedites affordable housing construction in many parts of the state. Under the reauthorization proposal, developers who make use of the law would be required to pay union-level wages — a standard that some in the building industry say still makes construction untenably expensive in many parts of the state. But it scraps a provision that mandates the hiring of union members for some projects.
“It’s an organizing opportunity and we’ll produce housing at all income levels. It’s what the state needs. Our own membership needs it. Desperately.” — Jay Bradshaw, executive secretary of the Northern California Carpenters Regional Council
The breakaways — the California Council of Laborers and the state Conference of Operating Engineers — join California’s unionized carpenters, which have been battling with the larger trades council over mandatory labor standards for housing projects fast-tracked under state law. The carpenters argue that a union hiring rule isn’t workable, as there aren’t enough unionized construction workers to build all the new housing California requires.
“We say, represent and raise all workers up,” said Jay Bradshaw, executive secretary of the Northern California Carpenters Regional Council, in an interview last month. “It’s an organizing opportunity and we’ll produce housing at all income levels. It’s what the state needs. Our own membership needs it. Desperately.”
The executives of both unions refused to discuss the shift with CalMatters. But in separate letters of support for the bill, shared on Twitter by its author San Francisco Democratic Sen. Scott Wiener, they described the proposal “a step in the right direction” and one that will “ultimately lead to more affordable housing…(for) our membership and those in need.”
That has not been the line from the council, nor many of their union allies, who have decried Wiener’s bill as a reversal of hard-fought labor protections.
“We represent our affiliates and our affiliates as a whole still remain opposed to the bill,,” said Beverly Yu, a lobbyist for the building trades.
Democrats in the Legislature pride themselves on being on the side of unions. Hearings earlier this year, in which trades members rhetorically sparred with carpenters and other housing supporters, left many members of the Legislature feeling uneasy and frustrated. Supporters of Wiener’s bill hope the crack in the trades’ coalition could help allay some of those concerns.
Two new trade unions backing the bill “sends a strong, strong message,” Wiener said. “This is definitely a big move.”
The goal of the 2017 state law, also written by Wiener, was to let developers in housing-strapped sections of the state side-step some of the early bureaucratic hurdles that often delay, curtail or stifle budding projects. In exchange, they must set aside at least 10% of the new units for low-income residents.
They also have to abide by higher labor standards. For anything over a certain size, developers have two options:
Option 1: Build something that sets aside all new units for lower-income residents. Developers of those projects are then required to pay their construction crews “prevailing wages,” generally the equivalent of what a unionized construction worker earns on a public infrastructure project.
Option 2: Build something with market-rate units. Those developers not only have to pay union-level wages, but are required to ensure that roughly half of their workforce has graduated from an apprenticeship program. Because the vast majority of these programs in California are run by unions, this “skilled and trained” requirement is effectively a hire-union rule. Back in 2017, the building trades made the inclusion of that provision the price of their support for the new law.
Half a decade later, the impact of that law has been lopsided. Roughly two-thirds of the proposed streamlined projects have been entirely affordable, meaning they are subject only to the higher wage rule, according to an analysis by UC Berkeley’s Terner Center for Housing Innovation.
Of the remaining third, it’s unclear whether any “skilled and trained” projects have actually broken ground.
Left untouched, the 2017 law will expire in 2026.
The market-rate side of the law “has not worked very well,” said Wiener, who argues that there are not enough apprenticeship graduates in the state to build the new housing the state requires. “The 100% affordable piece has worked like gangbusters.”
Citing that uneven experience, Wiener’s renewal bill this year scraps the “skilled and trained” standard entirely.
Under this version 2.0, the higher wage rule would apply to all projects — regardless of what is being built. But the bill does include a few other goodies for workers on large projects, including the provision that developers must request workers from an apprenticeship program first, effectively giving unionized workers a right of first refusal.
Even with these add-ons, the change in approach earned the bill the fierce opposition of the building trades and Wiener the ire of many in organized labor.
“Please tell me the last time a bill that red-lined labor standards out of existing law was passed in California?” lorena gonzalez, executive secretary of the california labor federation
Yu accused Wiener of “rolling back the critical labor protections that we believe were negotiated with our leaders in good faith back in 2017.”
Joining the trades in their opprobrium has been the California Labor Federation, which claims more than 2 million union members.
“Please tell me the last time a bill that red-lined labor standards out of existing law was passed in California?” tweeted Lorena Gonzalez, the Labor Fed’s executive secretary and a former Assemblymember, a week after Wiener introduced his proposal in downtown San Francisco.
“More profits for developers, less benefits for workers,” she added. “That makes zero sense from folks who claim to be pro-labor.”
California Democrats seek truce on housing bills
Even if the terms, the players and the goal posts have shifted over the years, this is a familiar debate in California’s Capitol.
The following year, Wiener, newly elected, took a lesson from that impasse and wrote the “prevailing wage” requirement into his streamlining bill. The building trades pushed further, securing the union-hiring requirement for mixed-income projects.
If getting the trades on board for a streamlining bill was seen as a major breakthrough, getting developers on board was arguably a bigger one, said Ray Pearl, executive director of the California Housing Consortium, which advocates for affordable housing construction.
“We made a really big leap in 2017,” he said. Though developers were reluctant to agree to pay higher wages, it was deemed a worthwhile concession in exchange for the bill’s promise of letting projects dodge years of litigation and administrative review.
But that moment of coming together was short lived.
State Rep. Buffy Wicks speaks during the first stop of the governor’s State of the State tour at Cal Expo in Sacramento on March 16, 2023. Photo by Miguel Gutierrez Jr., CalMatters
Oakland Democratic Assemblymember Buffy Wicks, then newly named as housing committee chair, teamed up with Bradshaw, the newly elected head of the Northern California carpenters’ union, and Pearl at the California Housing Consortium.
The goal: hammer out a counteroffer to the trades’ “skilled and trained” requirement that both the carpenters and the developers could live with.
The final deal, which Wicks happily included in her bill last year that fastracks the redevelopment of old stripmalls into apartment complexes, requires developers to pay their workers union-level wages. But for larger projects, per the terms of Bradshaw and Pearl’s negotiations, developers would also have to pay for their employees’ health insurance, make a first effort to hire union members, and open their payroll records for inspection to guard against wage theft.
These benefits would apply to union and non-union workers alike.The trades remained vociferously opposed until the last minute when legislators agreed to pass both Wicks’ legislation and another, similar bill that included the trades’ favored hiring requirement.
Neither bill will go into effect until later this summer. But Wicks’ approach has already become the go-to template for pro-housing legislators this year. That includes Wiener’s proposal to make the 2017 law permanent.
Wicks said she’s confident the approach will work again this year. With unions representing two trades now signing on, the odds of her prediction bearing out have likely ticked up.
“I think a lot of members feel like we litigated this,” Wicks told CalMatters before the two unions submitted their letters of support for Wiener’s bill. “We are ready to be, like, done with a ‘no to housing’ framework.”
“Like, done, done, done, done, done.”
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CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.
