The End of Prohibition
During the 1920s alcohol prohibition, one zealot suggested that, “liquor law violators should be hung by the tongue beneath an airplane and carried over the United States”. Another suggested that the government should poison liquor supplies through the bootleggers distribution, even though she admitted that several hundred thousand Americans would die as a result, she said it was worth the price.
Without doubt, those suggestions represent a fanatical extreme, but it also exposes the underlying psychosis of a movement, septic in an individual, and dangerous to society when fused in the collective. What began as a ban on alcohol degenerated into a cruel assault on those who drink.
Advocacy for alcohol prohibition began in the early 1800s and was fought over a century until the 18th amendment was enacted to prohibit the production of alcohol in 1920. How 500,000 vocal and well-organized prohibitionists triumphed in forcing their moral will over the personal choices of 99 million mostly complacent non-drinkers and disorganized wets is a triumphant story of master politics. It was also an example of our government’s failure to effectively legislate and sustain the unenforceable.
The promise of the drys going into prohibition was that it would create an economic boon. The same promise was made by the wets in repealing prohibition. Neither was correct, although the economic gains after prohibition were more evident.
Alcohol prohibition lasted thirteen years, while cannabis has dragged on for more than eighty years.
Here we are in Sonoma County, plopped smack dab in the middle of the world’s center of cannabis production exiting a long-running prohibition of cannabis. Now we’re entrusted with the singular task of disentangling ourselves from this barbed bramble of federal government social fencing. The rest of the world is watching and wondering, will we get it right?
Will we preserve the current 10,000-15,000 entrepreneurial and employment positions and the cultivating operations that have pioneered this industry in our county?
Based on research into cannabis cultivation practices and yields per square foot for indoor, greenhouse and sun grown operations, it’s estimated that Sonoma County growers, numbering around 9,000, produce between $3 to $3.5 billion per year for the wholesale cannabis market. Local residents consume about $150 million of that supply and the rest is exported.
Sonoma County’s regulatory bodies have to absorb a mature, fully functioning sector of the economy that is larger than any other sector in terms of jobs and gross production. That’s a tall order for the regulators and the regulated. The odds are stacked against a smooth process. But, our economic health hangs in the balance.
If we get it wrong and don’t usher in a period of compliance and regulatory peace, then we stand to lose a significant portion of our current economy. Bear in mind that if our cannabis wholesale production is indeed $3.5 billion, then approximately $3 billion of that is presently expended in labor, goods and services locally.
A loss of that magnitude is not just a dent in Sonoma County’s $23 billion economy. It’s 13% of our economy. That’s the equivalent of a celestial body half as big as the moon colliding with planet earth. For geography buffs, that would wipe out most of Asia. Ouch.
Let’s get it right on cultivation. Here are a few suggestions toward that aim.
Move as many commercial cultivation sites as possible to outdoor and greenhouse on agriculturally zoned lands. This will be particularly difficult for growers who have specialized with indoor grows in residential neighborhoods. The skill set needed to grow indoor and outdoor is very different. Education will be required if a grower doesn’t possess those skills; so, training programs need to be available. Which organization(s) provide that training is unknown.
In order to help in the transition mentioned above, there will need to be ways to accommodate those growers by allowing them to form cooperatives to share parcels of land with multiple permits and licenses. There will no doubt continue to be indoor cultivation within commercial buildings. There is, however, not enough commercial space to accommodate the transition from residential grow operations. We’re talking at minimum a need for 1.5 million square feet to meet demand. That would wreak havoc in the real estate market by absorbing everything available and then some. According to the Keegan & Coppin 2nd quarter 2016 report there was an estimated 1.4 million square feet vacant. It’s not likely to happen.
Streamline the licensing process (speed and ease) to allow for unlimited numbers of licenses, but restrict the canopy size to a maximum of one acre as prescribed in MCRSA (Medical Cannabis Regulation and Safety Act). Also, for at least the near future keep a cap on total acreage licensed for cultivation at 500. Keep in mind that Sonoma County growers can produce $3.5 billion on less than 500 acres. Allowing a large, diverse growing population of entrepreneurial farmers is the best strategy for producing amazing product and withstanding market dynamics. Limiting production will allow regulators and producers to stabilize under a new regulated system.
The above suggestions align with a focused strategy for Sonoma County in the cannabis market. We have a chance to cream the market, i.e. skim the richest part of it. We can produce the best product in the world. The safest, purest products are grown and manufactured and most sustainable operations are located in Sonoma County. Sonoma County cannabis sector sets the highest standards worldwide. That becomes our brand.
It’s a major undertaking to take that brand position and not without its risks. It requires tremendous coordination between regulators, policy makers and industry leaders and players. Regulation needs to create the least amount friction for producers so they can focus on innovation and reducing costs to stay competitive. Producers have to be forever innovative and market-driven. Complacency and arrogance is the disease that will kill any competitor trying to be king of the hill in the premium market. The cannabis sector will no doubt have a series of shakeouts over the next decade as more states approve medical and recreational use.
Sonoma County can stand strong and weather the changes sure to come if we can unify around strategy and support the producers in the impending transition.
“We are here to support the pioneers developing BALLE networks with tools that can help create true systemic economic change in communities.”