Can Mendo Salvage its Failed Pot Permit Program?

(An exchange at Tuesday’s Board of Supervisors meeting)

Supervisor Ted Williams opened the discussion by proposing the use of satellite imagery for code enforcement to identify Mendo pot grows/growers who do not have permits or have not applied for permits.

Supervisor John McCowen: “We are not forcing anyone into the black market. It's a choice people make. If they are still growing without a permit or permit application — I think we've had about 1200 applications in total. We have been accepting permit applications for two and a half years. So people who are still growing outside the permit process are doing so by the choice they are making. At some point if we are serious about having a legal regulated market we have to do something about the people who are not choosing to participate in the legal regulated market. This [Williams’ proposal to use satellite imagery] potentially is an efficient way of doing that. We have heard the stories out of Humboldt County where they do use aerial photography and imagery and they send out enforcement letters to people. They can dispute the findings in the letter and then move forward. In one case a greenhouse was you being used to grow vegetables I think. That can all be sorted out. But somehow the message needs to go out that you are either in the legal system or you are not allowed to grow cannabis commercially. I don't have a concern about what the total number of people out there is. My concern is if they are cultivating outside the permit process and beyond their exemption limits for either personal or medical use they should be held accountable. That's the number one way you are going to help sustain the legal market.”

Supervisor Williams: “I see this proposal to be done in concert with other changes. Maybe changes to our ordnance. Maybe we need to go to the state and lobby based on our findings. If we find there are 9000 grow sites I think it's time to ask the state: We have a problem with the way Prop 64 implementation has been rolled out. We have not been able to bring the majority of cultivators into the legal market. Maybe we have only brought 5% in. That's a failure. This board has worked very hard and county staff has worked incredibly hard. But if at the end of the process we only have 5% or 10% of the cultivators in the legal system, then the county is falling short on revenue and it's hitting us in every direction of services. We are not giving legitimacy to the cultivators who want to be part of the legal market and they are scared because they have seen their neighbors try to go through it and it's a very difficult process. The planning director said our ordinance is very difficult and one of the most challenging ordinances he's ever worked with. No fault here. But something needs to be done to shift this equation so that we can have a success of most cultivation being legal. In the years to come. The policy we set should have an eye for years out, not just tomorrow but maybe three or five or ten years out. With the national market opening it will be more important for the cultivators in our county to be part of the legal system. Today there may be a black market selling out of state. But that may not always be a viable business model. I worry that by closing Phase 1 and telling people, You had two years to get in the system and you didn't do it so you are permanently shut out. That would be a large economic hit to the county and it would trickle down everywhere even businesses outside of cannabis.”

Ron Edwards of Willits: “Is the letter going to give a person an opportunity to opt in? I would assume the reason they are not in is because of a zoning issue or some other reason. I don't think that's very reasonable. Also the cost. We are looking at $250,000 a year to contract with plant.com and then staff will need to do that. But the cannabis program is in the hole. You have less than 300 people with permits. There's chaos right now with people not really understanding what this (Phase 1) closing means. It's clear we need working groups. I don't think staff foresaw looking at future expansion after this phase closes. Our ordinance was a complaint driven ordinance. This would not be complaint driven. I think this indicates the failure of getting people into the program. I do know the ordinance is very complicated. I would rather see the ordnance reworked and try to do this again.”

Scott Ward, Redwood Valley: “I was in code enforcement for 13 years for the county when I worked here. It was complaint driven. We did not go out and seek problems. It just gives us more grief and more work than we have staff for. There are a lot of barriers the way the ordinance is written. I had a friend submit an application last week to beat the deadline and I had forgotten what a brutal experience it is to put all that paperwork together. He had a packet that was about 2 inches thick with a half a dozen state agencies. It was technically challenging and this is what I did for a living for 30 years. If you're going to do this it will change the culture of code enforcement and it needs to be sold to the public because because you are not well perceived in the cannabis growing community now because of the onerous parts of the ordinance. To have satellite images would be an example of Big Brother. Whether it's true or not, perceptions are reality. I think right now it would be better to spend the money on staff to get us over the hump and into the next phase and get it streamlined before we consider this. Let's get people in by making the system better and have it staffed up. Certainly people have had two years to get into the system but for some it's just too hard to get in and too expensive.”

Casey O'Neill, Cannabis Growers Alliance: “Supervisor McCowen, I don't think it's quite so much a choice for a lot of people. I've spoken to a lot of people who come to me to ask what they should do? How should they do this? For a lot of them I say, Do you want to be a business owner in a highly regulated, complex and changing environment that costs a lot of money? For a lot of people it's not so much a choice. It's a choice they would love to make but they don't have either the ability or the money to make that choice. If we start using satellite imagery and enforcement letters it will push people back under the trees and the ramifications would be much more damaging for widespread large-scale cultivation under the trees than for small-scale cultivation like under 25 plants in a sun grown patch. Bad things happen under the trees.”

Jed Davis, Potter Valley: “I would hate to see people who have not come in to the program now basically be wiped out. The way compliance has been shaped is that the well-funded corporate operators can go through this uncertainty and complexity and expense. This ordinance is very difficult to comply with and very expensive. I'm a pretty cerebral person and I pull my hair out trying to get through this. The goalpost is always moving. Government overdid this. We did not do it right, the barrier to entry is expensive and very difficult. We need to allow people to come in and start paying taxes and license fees and continue growing with a seller’s permit and a state permit and pay taxes. The main thing is they have to be tested so we know they are growing safe stuff going to proper outlets. Then a three or five or seven year amnesty to allow these businesses to come into full compliance. You have to spend $600 to take a 30 hour OSHA training for two employees? It just goes on and on. $2500 a year for the water board? $1200 application fee for just an application renewal? Why am I resubmitting a whole new packet and paying $1200 for a renewal? It makes no sense. That's the reason people are not coming into the program. Make it easy. Let them come in and give them time to make some money and slowly become compliant. Then we will have everyone in the program paying taxes.”

Supervisor McCowen: “We have heard a lot of comments about how difficult it is to come come into compliance. I believe most of those difficulties were created by the state and Prop 64. That combination. Prop 64 is voter approved and can only be changed substantively by the voters. The mandates the state has laid down can only be changed by the state legislature. We have items in our legislative platform that are intended to remove some of the burdens that were created by the state. But if the Mendocino County ordinance is difficult it is because it has attempted to accurately capture the things that have to be done to satisfy the state. The call to just let everyone in — that's actually where I started with this when we knew that state legalization was coming. I think this board, those of us who were here initially, were very much of the mind that: Let’s create a legal regulatory system. Let's bring existing growers into that system and by simply doing that we will improve the environmental impacts by getting people in a regulated legal system where we had people inspecting their activities, making recommendations for improvement. That would have allowed virtually anyone who sincerely wanted to come in and to do so. The tragedy of how this has all rolled out — there are many many people who advocated for legalization and regulation and who wanted to step forward and get a permit and pay their taxes and all the rest. But they are not able to do this primarily because the state has made it so difficult. Most of the complexities in our ordnance are there to try and benefit discrete categories of growers with unique situations to be able to allow them to participate and get legal. If we stripped out all those variations in the ordinance it would be simpler and more straightforward. But then even fewer people would qualify. We have to face the reality that at the state level the ordinance is what it is. We cannot simply say come on down, submit your permit, we will let you in. We don't have that authority to unilaterally do that. It doesn't help people if we approve a permit at the county level that will be rejected at the state level. Turning a blind eye to people who are blatantly growing outside the legal permitted system is an unfair business practice that undercuts the legal market and undercuts those of you who have been attempting to become legal and participate in the legal regulated market. You are facing unfair competition. This won't happen overnight if we do move forward with this (aerial surveillance). But I do think it's a reasonable direction to get the Departments to investigate streamlining code enforcement to bring people into compliance. If we are going to go forward with this we probably should open another window of opportunity so people have the opportunity to come forward whether they have gotten a letter or not. I can see us reopening that. And I think that would be equitable. That would give everybody plenty of advance notice that we know you didn't come forward for one reason or another, but you are going to have another opportunity.”

Supervisor John Haschak: “I worry about spending a lot of money on this eye in the sky and having people, instead of growing up in the sunshine, going into houses and going into greenhouses where you are creating a lot of plastic and garbage and waste and people going back into hiding because of this. I don't support it at this point.”

Supervisor Williams: “I move we direct County Counsel and Planning and Building Services Director to determine the feasibility of using satellite imagery to streamline cannabis code enforcement, collect fees and/or taxes from unpermitted cultivation and based on findings consider reopening phase one as necessary to bring cultivators into compliance.”

Williams’s motion passed 4-1, with Hascak dissenting.

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Has the County/Supes really thought this through? Simply taking these (arguable) remarks and estimates at face value, we have around 300 permits issued out of around 1200 that have applied — in two and a half years (and most of those in the first few months before people realized what they were facing to apply). Many of the remaining 900 applicants have just given up because they belatedly discovered that the process is beyond their abilities or budget and have either returned to the black market or are not/no-longer growing. Some of the remainder will be denied. And given the timing, these first few (hundreds) were supposed to be the “existing” growers that the County was trying to lure into the program. So as they approach the end of this initial “phase” (that was supposed to bring existing grows into the system) maybe 500 will get permits, if that. That pathetic result — no matter who’s to blame, the County or the state, or the applicants — has required a burgeoning pot permit staff of 12-15 people and millions of dollars in application costs, fees, consultants, taxes, loss of revenue, and staff costs, etc. 

For a measly 300 permits.

And the process continues to change.

Now, with the word in the pot growing community having spread about how hard and costly it is to get a permit, the County wants to somehow identify and offer amnesty to some of the thousands of unpermitted grows in Mendo without any significant changes to they all acknowledge is a burdensome and expenisve permitting process that has taken a lot of staff and General Fund money just to get 300 people into the legal system? Even if a few hundred more apply, who’s going to process and handle and inspect and enforce those new applications and permits?

What's that old line about the definition of insanity?

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Notebook

Supervisor Ted Williams’s noble attempt to get the Board to do something to enforce Measurve V, the voter-passed initiative to declare intentionally killed standing dead trees via poisoning them, went nowhere Tuesday morning when Williams couldn’t even get a second on his motion, even after he tried a second watered-down version to send the question to the Board’s General Government Committee to look into. (We’ll have more about that discussion in the next few days.)

But the most outrageous moment on Tuesday came when a rep from Mendocino Redwoods, Mendo’s prime tree-poisoner and prime target of Measure V, came to the podium:

“John Curry, Mendocino Redwood Co. — Mendocino Redwood Co. has no objections to an affirmation such as this [“Affirmation of the County’s Duty to Implement and Defend Laws Created Through Initiative”]. But it should be accompanied by an affirmation by the board to ensure that the County has the authority and the ability to cost-effectively enforce a ballot measure before approving it and placing it on the ballot. Imagine yourself in a situation where the voters approved a racially discriminating policy and passed it. There's no authority or way to enforce that by the Board of Supervisors. In addition, the county code says that any ordinance that goes against the Right to Farm Act should be considered immediately repealed. The Measure does not state who will enforce it even if it became law. The only mention of the County is that it shall not travel on private property. We think that this is out of the jurisdiction of the County to pass a regulation like this and it should be regulated by the Board of Forestry.”

It’s one thing for MRC to dispute the legality of the Measure, of course — they’re already on record about that. But to compare the public’s declaration that poisoned trees are a nuisance to passing a “racially discriminatory policy”? That’s a new low in corporate whining. 

Unfortunately, nobody in the room, including the Supervisors, called Mr. Curry on this outlandish reference.

Compare that low-point with the following high point statement about the poisoning practice and the fire hazard it creates by Willits resident Cynthia Raiser Jeavons: “Capitalism makes its profit by taking public resources — the trees, the air, the waterways — and putting as much risk on the public as possible by using those resources. The public bears those costs and a company or corporation takes whatever profits they can make and those are personal profits. But the risk is the public's. And that's a real concern.”