The Golden Goose Egg

(Selected statements from Tuesday’s Fee Schedule Hearing at the Board of Supervisors)

Casey O'Neill, local farmer, policy chair of the Mendocino Cannabis Alliance:

“I would like to do a little compare and contrast. I farm vegetables. We sell at farmers markets. I pay a $35 to tell the Department of Ag what type of vegetables I grow and what volume. I register my scale at a dramatically lower scale price than if it was a cannabis scale. My vegetable scale cost me $15; my cannabis scale costs me $115 to register. This compare and contrast can be applied across the board. At times it becomes a bit frustrating. The reality is that cannabis is still being treated as something other than agriculture. That's why the fees are so high. That's why the permit processing is so expensive. There is an element of this happening at the state level, but at this point all of the things that are required to be done at the state level, we are requiring them to be done here locally and creating a duplicative process. The flip side of it is the CEQA question. I recognize that that is a big issue and whether or not the county's program will suffice for CEQA which saves cultivators significantly from having to do individual site-specific CEQAs. But why is it that for cannabis we are considering the minutia of the entire property? Why not just the cannabis? The reality is we are choosing to take this marginalized populace and put them under a hyper-microscope with the permitting program which is creating excessive cost overruns and long delays and the inability for county staff to be able to process all the paperwork because there's too many elements to it. I would love to say I have a magic bullet solution there. I don't. But it cost me approximately $60 to be a vegetable farmer and it cost me maybe $10,000 to be at cannabis farmer. I'm like $50,000 deep into permitting over the last couple of years already including building permits, the various state water boards, all the different things. The county does not deserve a lot of that frustration. A lot of it is at the state. I am voicing some frustration that — I apologize if I come across like I'm angry at you all because I'm not. But the reality is it's pretty broken.”

‘A Day In The Life Of A Cannabis Inspector’

by Sean Connell, Mendocino County Cannabis Program Manager

“We understand that people feel this is a fairly simple process. I intend to show you the subtle complexities of this process. We estimate approximately 10 hours of work for a cannabis inspection because of the relative newness of our staff — the cannabis unit has experienced the loss of a staff member approximately every 6-8 months since its inception. Research leading into a cannabis inspection takes two hours to refresh the submission of the operations plan, examining their operations and cultivation plan to find out how, where, what type, if pesticides are used, the buildings that are used, the soil compounds, the garden layout, the locations. From there they will do a review of the site plan and balance that against our GIS which is our county parcel viewer and then ultimately end up with a reference on Google Earth so that they can find their route to the location. Many of these locations are off the main roads. It's important to remember that our county staff is traveling to all aspects of this county. Mendocino County is known for its road conditions and these sites are often in elevation off these main roads. It requires extensive knowledge of the landmarks to make sure they are on the right path. These are fairly new inspectors in this county. So their relationship to the rural aspects of this county does not exist. They are forced to do that through research and development. The primary role of our inspectors is to check compliance with canopy size for the location in order to determine the cannabis canopy size. It depends on the garden layout. We get asked questions like is this in a smart pot or is this in a raised bed? Or are they in individual planter boxes? Are they in rows? Are they terraced? Are they terraced with hoop houses on them? Are the hoop houses packed with plants? Are there walkways? I think you can see my point that these are not standard inspections that we are going out to do. When I was a building inspector that was vastly different. As a building inspector there were over 50 years of California regulations at a minimum to address how things should be done on the job site. Most people at this point in time are used to that standard. In cannabis we have two years of standards that we are trying to establish. And as we are trying to establish those minimums these ordinances have changed to create this industry. We average about four hours for that inspection which seems like a lot. As I accompany these inspectors I can assure you that we are on site for about four hours. There's a two-hour distance to drive and a roughly two hours return time. Then there are follow-up explanations as we continue to work with the applicants to make sure that we receive all of the proper documentation. It is an ongoing effort. Our ability to process these applications becomes much slower as we and the cultivators wait for the state to process portions of the application. So our work continues. The inspectors are constantly checking the program email, reaching out for the required documents to lighten their workload. Our inspectors have also assisted in the administrative portion of this program, actions like uploading documents, making phone calls, checking emails, checking documents for uploading to “Track It” [the County’s new task tracking software system] and individually filing those papers into the corresponding hard file. All those actions are done by the inspector. The initial thought was that the cost of the permits in this program would cover the cost of inspectors. It has become clear that that has not happened. We are here today to request that you approve these fee increases as we have requested them so that we can continue to do the work to increase the efficiency within this program and issue the permits in order to not be subsidized by this county any further.”

Supervisor Ted Williams:

“I did some research on this by going to a bar," Williams joked, "I talked to cultivators who for the most part told me that the program is ridiculous. It doesn't pencil out. The size that they are able to grow with all these fees and regulations — they just can't do it. They are staying in the black market. The program is chasing cultivation to the bottom whatever the bottom may be. While I 100% support cost recovery I don't think we should be subsidizing this program. I believe we need to look at ways to cut the amount of work we put into it. Imagine if we were to go out to the grape growers with a tape measure and measure the size of what they are growing and see whether they are within the permit and what to tax. It would be the same problem. We are doing far too much work. I don't want to bypass the Cultivation Ad Hoc Committee to bring ideas forward, but I would like an update from the Ad Hoc on what efforts are being made to reduce the amount of effort as it relates to the proposed fee schedule?”

Supervisor Carre Brown (responding to Williams):

“In traditional agriculture I think there was an explanation of building codes and how many years of progress — it's the same with traditional agriculture. You are going to plant your vines certain distances or near irrigation and based on whether you are doing hand picking or automation picking, that's the same for almost any of the types of agriculture that you deal with, but it's done and has been done certain ways for a very very long time. There's a reason for it. So I think with this new industry, and I hear what you're saying about the black market, it's a whole new world in what we are doing and when you stop to think about it agriculture itself struggles and these individuals that are farmers as well are finding out what it's like to be in the legal world and to be able to produce I will say crops, to be in traditional agriculture, this is what it is. It really is. Market is what creates the prices, prices and what individuals earn are what they have to pay the fees to support their families and I will say that because of the glut on the market that was also the dairy buyout where we had to sell two thirds of our herd of 340 head in order just to pay our operating loan for the year. So talking to me about agriculture, I've been there, done that, and I do understand. But there's no way we could sell on the black market because if we did government would put us out of business with fines, etc. I just wanted to add that on.”

Supervisor John McCowen:

“Looking at the cultivation ordinance with a view to the impact on the fee schedule is no more in our purview than looking at it by the cannabis Economic Development Ad Hoc. The fee schedule is related but it was created independently from the ordnance provisions. Unless you want to start knocking out a lot of the requirements in the ordinance which I believe would instantly put us at variance with state law. So the things that we ask be inspected pretty much mirror what state law calls for. So my answer would be: No, we have not been looking at the implications of the ordinance to the fee schedule.”

Williams: “I think we need to look at the amount of work that goes into every aspect of this program because even if we can justify the amount of work based on state regulation and we can come up with a fee schedule we are keeping people in the black market because they simply cannot afford to participate.”

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There’s a lot to comment on here. But let’s just focus on the single biggest thing they danced around: the County is unnecessarily duplicating state inspections, resulting time consuming processing, high fees and long delays, causing large numbers of potential applicants to stay in the black market and not contribute fees or taxes, costing the County way too much money, and effectively killing the cannabis goose that has so far laid only goose eggs.

And yet, amazingly, not one of these well paid officials seems able to simply ask staff: Why are we duplicating state processes? Why not just do a simple zoning check, and then a check off of the applicable state documents being completed, and get out of the way and issue the permit?

Apparently, this simple yet significant step is beyond Mendo’s capacity to even conceive of.