Article by Thomas Fuller, New York Times
California’s multibillion dollar marijuana industry, by far the nation’s largest, is crawling out from the underbrush after voters opted to legalize cannabis in this month’s election. In Sonoma County alone, an estimated 9,000 marijuana cultivation businesses are operating in a provisional gray market, and are now looking to follow the path of the wine industry, which emerged from its own prohibition eight decades ago and rose to the global prominence it enjoys today.
But the bruising ordeals of one of the state’s largest cannabis companies, CannaCraft, have made many in the marijuana industry fearful, and they also suggest a long and bumpy road from marijuana’s approval at the ballot box to the same on-the-ground acceptance enjoyed by wine and beer businesses.
When CannaCraft, which produces medical marijuana products, came out of the shadows this summer, the company was hammered for it. It is still recovering from a raid in June by federal and local law enforcement officers on its newly opened headquarters and the seizure of $5 million in equipment, inventory and cash. This year, company drivers have twice been stopped by the California Highway Patrol, and, in one case, 1,600 pounds of marijuana was seized.
In what may be a sign of things to come after the drug’s broader legalization, medical cannabis companies like CannaCraft — which have operated in a quasi-legal, unregulated market, or gray market, for the past two decades in California — continue to be whipsawed by the glaring contradiction between a federal ban on marijuana and still-evolving state laws that should, in theory, shelter the companies from prosecution. Cannabis enterprises deal almost exclusively in cash because banks, fearing federal consequences, will not take their business.
“They are asking people to come out into the open, but there’s this mistrust,” said Dennis Hunter, 43, a founder of CannaCraft who has spent his entire adult life as a marijuana farmer. Mr. Hunter has been arrested three times, and was sentenced in 2005 to six and a half years in federal prison for growing marijuana and fleeing during a raid. “You are basically hiding for 20 years and then you swing the doors wide open. It’s a risk,” he said. “And there’s no clear path.”