Rising Taxes and Dropping Prices: Cannabis Farmers Gather in SoHum

[Editor's Note: This article was originally published on Redheaded Blackbelt]

On Sunday, November 21st, on a beautiful, sunny day, about 50 community members and cannabis insiders gathered at the Southern Humboldt Community Park in Garberville trying to figure out ways to survive the current cannabis market while saving the community at large.

The initial call to action, put out by Chris Anderson, CEO of Redwood Roots, Inc., a cannabis distributor in Benbow, was to discuss a march on Sacramento to protest an increase in cultivation tax, effective January 1st, 2022. However, Chris admitted he may have gotten ahead of himself after speaking to other industry insiders. Instead, he encouraged the cannabis community to come together to effect change where they can by banding together with already organized efforts. Chris believes the three main problems that the cannabis industry is facing is over-taxation, over-production and lack of retail.

Ross Gordon, Policy Director of the Humboldt County Growers Alliance (HCGA), acknowledges the community’s need to gather, “It’s obviously a really heavy time, and a really important time, to try to think about what we can do on a community level to try to make some change.”

The “offensive” cultivation tax increase, according to Ross, was built into Prop 64 as a yearly increase to account for inflation… “which is funny because the price of cannabis isn’t inflating, but our taxes are inflating.” He believes a lot of the challenges the community faces stem from Prop 64, the legal framework for cannabis legalization.

Natalynne Delapp, Executive Director of the HCGA called for local farmers to band together to make policy changes. “Things are changing on a county level, …the political pendulum is swinging. …There’s a lot of work to keep doing on the county level, but generally speaking, we do have a very supportive county – supervisors and staff – you all pretty much know how to get ahold of them. Never don’t reach out to them.” She said the county officials can lower the Measure S taxes at any time. She said the community should hold the county responsible, “Don’t let them blame-shift away.”

Natalynne said the county is looking at revising Measure S, something that may go before the voters in June. She encouraged the group to be vocal, a sentiment shared by Tiffany Smith, Project Trellis Committee Member, who said the community needs to be speaking up to the local government at the Board of Supervisor Meetings. “Speak out! Public comment is very important and there’s not that many people that actually [speak up].”

Roger Harrell, COO of Redwood Roots, does not believe there’s a one-step fix-all for the challenges the cannabis industry faces, but he is really pushing for the community to get involved as a whole to push back against the taxes implemented by the state. He encourages the local farmers to work with the local businesses that are also seeing a down-turn in sales. “I’ve never been under the belief that the community that made money here, didn’t reinvest it here.” Now, he believes that money is being sent to Sacramento in the form of taxes… cultivation tax on a pound of cannabis sold at $500 is about 32% tax. He wants to see farmers and local businesses demand that taxes be cut, or at least, reinvested in the communities that they were generated in. The state collected over 333 million dollars in cannabis tax revenue during the 2nd Quarter of 2021 alone.

Addressing over-production, Chris encouraged local farmers to do what they do best, grow incredible cannabis. “Quality over quantity,” he preached. For his part, he said that three years ago he was seeing approximately 30%-35% of the cannabis coming through his business being of AAA quality. Last year it went down to 20%-25%, this year, 10%-15%. Quantity doesn’t matter in today’s legal cannabis if farms cannot sell it, he explained. There’s a lot of cannabis on the market right now, according to Chris, anything below AAA is not selling.

Kyle Greenhalgh of Heritage Mendocino, a dispensary in Ukiah, said that retail shops are down 30%-40%. He says this is not just happening to the cannabis community but the country as a whole. The economy is hurting in all sectors.

There were numerous mentions about farmers branding their product or joining larger, umbrella brands. After the group discussion, Roger Harrell, discussed with us the retail distribution happening at their company. At present, Redwood Roots is packaging in 5 lb increments. Farms with quality flower should talk to their distributors about marketing their retail-ready products, packaging under their distro label or looking for white label opportunities to get more of their product on as many shelves as possible.

Another path forward suggested to the group was to join advocacy groups, like the HCGA, so that local farmers can break stigmas still attached to the cannabis industry and affect policy change. Linsey Jones, part owner of Aloha Humboldt, said, “Talking about coming out of the green closet, it’s really important we embrace the other sectors where we can be involved that are already existing; …Your local chamber of commerce, your fire safe council, …talking to your local CHP.” By networking with local agencies and joining local advocacy groups, communities can form alliances, aggregate resources and purchase power…Work with your local community, …do these alliances, then you can apply for Trellis funding together. And then each region can tell its unique, cultural story that’s authentic. And that’s what people want …creating a connection…that’s what your consumer wants.”

Leann Greene, Executive Director of the Southern Humboldt Chamber of Commerce, encouraged the group to join the chamber, stating that the chamber advocates for all their local members, including their cannabis farm members. “As an organization designed to support businesses and tourism in our area, the Southern Humboldt Chamber is here, [we’re] poised to help.”

Although there were no bullet-point presentations highlighting a path forward, camaraderie and cohesiveness prevailed. Sign up sheets and brochures were passed around, and Chris Anderson reminded the group that they were not just farmers, but businesses. In spite of the call to capitalism, the Humboldt vibe permeated. Like almost every Humboldt gathering, pot-smoke loomed above the crowd, tie-dye intermingled with Carhart, food and drink flowed, and kids’ laughter hung in the air. The event closed with a song about the Humboldt farmer’s plight performed by Aiyana Floreterna.

Perhaps some things do stay the same…