Big-Farm Takeover Feared Under California’s New Pot Rules

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Big-farm takeover feared under California’s new pot rules Peter Fimrite Long-held fears of a corporate takeover of cannabis agriculture bubbled to the surface Friday, a day after the state released detailed regulations for what has historically been a loosey-goosey trade populated by small backwoods farmers.

The rules for the growth, distribution and sale of marijuana in California, written by three licensing agencies — the Department of Health, Department of Food and Agriculture and the Bureau of Cannabis Control — do not limit the number of licenses a grower could get or the total acreage one could farm.

Small growers were counting on the state to set limits, which they reckoned would give them a chance to get a foothold before the big operators moved in. They had hoped for a cap of 5 acres per farmer for the first five years.

“Frankly, this could be a catastrophe,” said Hezekiah Allen, executive director of the California Growers Association, an advocacy group for more than 1,000 medical marijuana farmers, business owners and patients. “It creates a clear cut-and-dried advantage based on how much money a business has.”

The complicated guidelines issued this week actually do limit the size of a marijuana grow depending on what kind of license the farmer obtains — with a maximum of about an acre per license. But, there are no limits on the number of licenses a farmer can have.

It means a big-spending plantation owner may be able to obtain dozens, or even hundreds, of licenses, Allen said.

Although the California Department of Agriculture proposed limits in an environmental document issued Monday, the limits were not included in the final regulations released Thursday.

“This decision is likely to push most of the existing growers back into the black market and create tension between the unregulated and regulated markets,” he said. “There will be an abundant supply of dirt-cheap cannabis in the state and there is a real possibility that this marketplace could go through a bubble burst collapse.”

No explanation has been given for removing the limit, but Allen said the concept has been a “bedrock policy” since 2015. Although it wasn’t in Proposition 64, which legalizes adult use of marijuana starting in January, the concept was used to sell the initiative to small growers.

Even with the limits, legalization of recreational marijuana is expected to catapult thousands of growers in California into the frenzied forefront of a new retail industry that will bring fundamental changes to agriculture and commerce.

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