Cali Weed Farmers – are struggling to stay alive with high taxes, forest fires and the illegal market
California has long been considered one of the cannabis capitals in the world – some of the finest weeds come from there. If you ask any Californian they will no doubt say it is the height of the excellence of weed.
With legal cannabis on the books, you’d think the cannabis industry was going to thrive – and it seems “okay” on paper.
However, traditional cannabis farmers sing a different tune. By Erbe we refer to the “Pre-Prot 64” breeders. We’re not even going back to the old OG breeders.
Nonetheless – these smaller farms, many in Northern California, say an over-saturated market and high regulatory costs make them sweat!
In this article, we take a closer look at the problem, possible solutions, and how these cannabis farms aim to survive.
An oversaturated market …
California consumes approximately 2.5 million pounds of cannabis per year, according to the California Department of Food and Agriculture’s 2017 Standard Regulatory Impact Analysis.
However, places like Humboldt produce £ 6 million a year and Prop 64 added vertical integration to the equation so Mega Farms went online.
According to Business Wire, California will illegally export 12,717,133 pounds of cannabis in 2019 (source)
However, we are not talking about illegal exports here. While some of the legal crops will somehow get into illegal exports – there’s a clear problem in California – they’re growing too much weed.
Since it is not possible to export legally, it means that many establishments are seeing a return on inventory, with pharmacies saying “it just doesn’t sell”.
This means the price per pound will go down but the cost per pound will stay the same. As you can imagine, this becomes a chore for small business owners to say the least.
Understand the cost per pound
“Times are really tough for smallholders,” he (Jason Gellman) said. “Most of us are in the red right now, and if you’re lucky enough to sell your product, the average price per pound appears to be around $ 700, which is way below. The county wants their money, the state wants their money, the banks want their money, the trimmers have to be paid and all other fees. It costs about $ 500 for a smallholder to grow a pound. It hardly pays the bills. ”- SOURCE
According to Natalynne DeLapp, the problem is that Dep Crops came into play. Dep crops are “low-light plants” that aren’t tied to their regular seasonal crops – meaning growers can cycle through harvests much faster each year.
“The wholesale price for 2021 is between $ 650 and $ 750 a pound,” she said. “The wholesale price for 2020 AAA flowers is between $ 400 and $ 500 per pound, otherwise only between $ 200 and $ 400 per pound. Some farmers have traders return their 2020 harvest because they cannot sell it. It does this after paying for trimming ($ 70 to $ 200 per pound), testing, and payment of state crop taxes ($ 154 per pound). “
This means these smallholders will lose money, making it difficult to get a harvest off the ground for the next year.
This is how you help the farmers …
It is important that we keep these historic farms alive. Otherwise, we will see a corporate takeover of cannabis that will ultimately spawn generic cannabis that no one really wants – but is only consumed for convenience.
Fortunately, the cannabis culture is quite strong and while these farms may have problems, home growing will always be the “organic solution”.
Even so, these farmers need some help, and this could serve to ensure that other states don’t get into a similar pit.
First, providing unlimited growing space may not be the smartest idea. There has to be some kind of balance between production / consumption within the state under the pseudo-legal status.
The main problem is that California cannot “sell” its cannabis to other states; it is bound by federal law. These farmers would have no problem if they could sell to New York or similar states – especially since they have a longer growing season.
Even international markets could provide the necessary sources of income for these farms, but unless federal policy changes are made, these farms will depend on their local communities and counties to survive.
One of these suggestions is to lower the processing fee. Due to the oversaturation of cannabis, the state could technically cut inspection costs to handle the volume, but it’s difficult to reset norms once they’re in place.
According to DeLapp;
The county can support state and federal efforts to help farmers, ”she said. “At the state level, it is important that the cultivation tax be abolished – no matter how low the price of cannabis goes, the state still taxes the cultivation at a flat rate of $ 154 per pound. And at the federal level, we need a legalization law that recognizes cannabis as an agricultural activity that protects smallholders rather than pushing the industry into further consolidation. “
This is probably one of the best things that could help California’s ailing cannabis industry. They have everything it takes to be a global powerhouse other than having money-hungry politicians in charge.
The sticky end result
We don’t know how many companies will survive the next 2-3 years as national and international markets go online. Until then, it’s a good idea to support your local cannabis farms – keep the culture alive and buy locally.
I would also like to see some kind of “farmers market” system open up to create an alternative source of income for these smaller businesses.
Of course, my suggestion has always been to have a flat federal license of $ 1,000 a year to grow weed with profits of up to $ 1,000,000 – that way you protect the “little guy” while you protect the American one Giving companies their own piece of the pie.
We can’t all win, so let’s create a just marketplace for everyone.
CALIFORNIA’S CANNABIS MARKET, READ MORE …
IS CALIFORNIA ENOUGH TO PROTECT SMALL FARMERS?
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