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Cannabis cultivation ordinance gets a hard look

June 17, 200 — With state provisional licenses to grow cannabis set to expire in 2022, supervisors voted 4-1 yesterday to research alternatives to the current permitting system, particularly what it would mean to focus on land use. That  would be the local regulatory role if the county’s cannabis cultivation program faded away, allowing the state system to step into the foreground. Supervisor John McCowen introduced the item, asking the board “to go in a new direction, instead of continually tinkering with the current ordinance, which we have been doing for years, with the hope that one or two more little fixes, and it’ll suddenly become functional.”

Supervisor Ted Williams added that if the board takes no action, local growers who are operating under a state provisional license will not be able to get state annual licenses by 2022, and will be unable to cultivate outdoors legally.

Trent Taylor, with code enforcement, explained the difference between the state and county purviews, and offered an example that’s been a topic of many long hours of impassioned debate. “If you have land use concerns, where you’re issuing a discretionary permit in certain zoning areas, then the county can dictate whatever setbacks they want. I know that the state will not talk about setbacks, but setbacks are genuinely a land use issue, not necessarily just a cannabis issue. So the method of cultivation would be dictated by state law. How the land is being used and how the cultivation is situated would be a matter for county regulatory enforcement and regulatory law.”

The main issue is the failure of the cannabis program to attract adherents and generate revenue. While this year’s cannabis tax projections are $4.5 million, the program itself is almost $100,000 in the hole, with $525,000 in revenue and $632,000 in salaries and expenses. In a memo, McCowen wrote that county staff has referred about 170 applications to the California Dept of Fish and Wildlife for review this year, but only 54 have come back.

Supervisor John Haschak, who voted against McCowen’s proposal, suggested tidying up some loose ends in the current batch of cannabis conundrums, including disbanding the three ad hoc committees and appointing only one for cannabis, revisiting ad hoc recommendations, coming up with a policy about hemp, and having a meeting with CalCannabis and state agencies about resolving CEQA issues.

The state wants site-specific environmental review for each grow site, but legal staff from the county and the California Department of Food and Agriculture have spent the better part of a year hammering out a workaround document called Appendix G. In a letter to the board, the Mendocino Cannabis Alliance cautioned that “Substantive changes to our county’s cannabis program could jeopardize the ability to use Appendix G to transition existing operators from provisional to annual state licenses, because it was developed taking into account specific language in our ordinance.” The Alliance estimates that about 600 applicants are waiting on a sensitive species review from the California Department of Fish and Wildlife, but McCowen wrote that CDFW only has one person reviewing applications in addition to a number of other duties.

Susan Tibben is one small farmer who urged the board not to hand over more of the process to the state. “We’ve interacted with the cannabis advisory committee and numerous state agencies throughout California, particularly in Sacramento over the last number of years and we find the state interaction with cannabis is largely driven by mega-grows and law enforcement staff. Firsthand knowledge of actuall smaller operators and legacy farmers is virtually non-existent. So should we move forward with Supervisor McCowen’s proposal, we respectfully but urgently request that local knowledgeable staff act as a liaison between the county and the state to create trust and adoption by the heretofore largely neglected legacy operators. We the small heritage farmers are a sensitive endangered species. Please don’t let us go extinct.”

But Michael Wheeler, the vice-president of policy initiatives at FlowKana, had a different point of view. “Top shelf craft cannabis represents 10% of overall cannabis sales,” he told the board, adding that FlowKana wants to diversify its product portfolio “and begin to participate and compete in the other 90% of the cannabis market. To do this, we spent millions of dollars to build a new manufactured product facility and we need access to huge amounts of value-priced cannabis, which is known as biomass to make these products. And the economics of growing biomass on 10,000 square feet are truly untenable...while we would greatly prefer to meet the need locally and purchase this biomass in Mendocino County, the current ordinance just makes it impossible. So we very much want to bring the jobs and the tax revenue that come with biomass production to Mendocino County in 2021 and to do so we very much support streamlining the process for approving cannabis cultivation in the county by focusing on land use. And haste is really needed to streamline the way cultivation licenses are processed so the new cultivation sites can be planted in April of 2021.”

County staff will continue processing permits under the current system, though the board gave direction to compare and contrast that system with the land-use approach. One possibility that came up during discussion was using some part of the $2.2 million equity grant to pay for application fees. The board will revisit the topic next month.


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