[This is part one of a two-part series on Santa Cruz County’s cannabis industry. — Editor]
High in the mountainous hinterlands above Boulder Creek, where the steep, bumpy road is passable only by four-wheel drive and cell reception is all but a rumor, there is a greenhouse that once held 250-square-feet worth of cannabis plants. Now, it’s empty.
For nearly a decade, property owner “Bam,” as he’s known by friends, has been living on the property and growing cannabis, some of it for his own medicinal use and that of a few friends, he says.
Bam says cannabis helps alleviate his symptoms of Lyme disease, and lessens mood swings stemming from a traumatic brain injury.
In July, Bam got a visit from the county’s Cannabis Licensing Office, which includes a contingent from the Santa Cruz County Sheriff’s Office. Officials notified him that he was growing the plants—as well as distributing and manufacturing cannabis-related products—without a license.
After cutting down all the plants, they searched his home for contraband, he says.
Thanks to a set of county regulations crafted in 2018 to help ease the county into the legal market, Bam has not been charged criminally. However, he now faces $7,500 in administrative citations, and an additional $10,000 in red-tag fines, he says.
“It’s been a nightmare,” Bam says. “They are trying to break the bank for people who have no bank.”
POT TO WORRY
The Cannabis Licensing Office includes Cannabis Licensing Manager Sam LoForti, one principal planner and two code compliance officers. It also includes Chief Deputy Steve Carney, who oversees two sheriff’s deputies for the office’s enforcement arm. Carney says his team’s role is to help implement, regulate and enforce the county’s relatively new cannabis ordinances.
Carney says that after Proposition 64 passed in 2016, many government agencies quickly learned that California needed tough law enforcement to crack down on the black market. Otherwise, users would not have much incentive to buy weed legally. “Our continued goal in working in the cannabis office is to help the regulated market flourish,” Carney says.
Enforcement operations begin at a property, Carney explains, when the licensing office receives complaints. The sheriff’s office provides security and offers law enforcement advice during the visits, he says.
Investigations largely begin after findings of bad behavior, like environmental degradation, money laundering or interstate transport, Carney says.
Carney says enforcement strategies have changed from the days when violators were merely mailed letters informing them they were out of compliance.
“We weren’t having success, because the people would just move illegal activities elsewhere,” Carney says. “We were trying to work with folks instead, but that didn’t get much traction because people were taking advantage of it.”
In April, authorities seized 540 pounds of processed marijuana and more than $140,000 from five properties suspected of skirting the county’s cultivation rules. Businesses faced charges such as money laundering and tax evasion.
The sheriff’s office has executed 55 criminal search warrants at 65 sites since January, Carney says. Earlier this year, his team confiscated 900 plants from a grower in the San Lorenzo Valley, issuing a warning since it was the first offense, he says. The team returned in September to find the person was still growing. He’s now facing a felony cultivation charge and a “substantial” civil fine, Carney says. The suspect, Carney adds, was damaging the environment in their own backyard by diverting water from a local stream and contaminating the runoff.
Santa Cruz County Supervisor Ryan Coonerty says environmental damage and fire risk are two reasons that county policy calls for reducing the number of small grows in the mountains.
“We want to move it to places that are zoned for commercial agriculture,” he says. “It’s not easy, but we’ve tried to do it in a way that works for the environment and neighborhoods.”
Coonerty says that by June 2021, the county plans to have licensed all qualified registrants who have applied for state and local permits, with a target of 102.
“We’re hoping to get people into business as quickly as we can,” he says.
Bam and growers like him have opined that moving mountain grows into Pajaro Valley greenhouses would be an unfortunate step away from the terroir that makes the county’s cannabis unique.
Bam also argues that the “vast majority” of growers are small-scale farmers who are hoping for a license and a chance to fly on the right side of the law.
“Do you know how much I would love to just be able to pay my taxes like a normal citizen, and go about my business and be thought of as an asset to this community?” he says. “Do you know what a badge of honor that would be?”
SHINING A LIGHT
Given the resources involved in the county’s effort, Santa Cruz cannabis attorney Trevor Luxon argues that the county has misplaced its priorities. The county has five people working enforcement and two processing applications.
“If county leaders directed more of the resources to licensing, they wouldn’t have to worry so much about enforcement,” he says
Luxon says that many of his clients are caught in a no-win situation, where they must either put their livelihoods on hold while waiting for their applications to be processed or take their chances growing without a permit.
Such growers have nowhere to sell their wares legally, since California law requires distributors and retail establishments to show they purchased from a licensed cultivator.
Once caught in the system, they’re slapped with administrative fines that start at $2,500 and can be as high as $7,500. They can also be hit with misdemeanor charges for illegal cultivation. If officials find illegal items such as firearms, illegal drugs or evidence of sales to minors, they can be charged with felonies.
For those looking to procure a cannabis cultivation license, the county charges a $1,500 pre-application fee, and an overall fee of $3,500 per site. Applicants must also pay $100 for background checks and $300 for on-site inspections. Additional fees are possible.
In all, local permitting can run from $3,000-8,000, says Cannabis Licensing Manager Sam LoForti.
LoForti acknowledges that commercial use permits are difficult to obtain, and that the required infrastructure improvements can be expensive. He stresses, though, that local cannabis licensing isn’t treated differently than any other permitting process in the county, and that it was created to help safely regulate a burgeoning industry.
“These are standards the state has, and mainly they are driven by state law,” he says. “We’re not going to change safety-related standards for any type of development.”
According to LoForti, there are about 28 use permits in process, and more than 50 operators are working toward their permits.
The two-stage process includes a pre-application screening, which can take up to two months. Growers also need a use permit application—an expensive proposition because it has to be drafted by professional engineers and must follow state code, LoForti says. Only one pre-application has been denied.
Once approved, growers must follow size minimums based on zoning and parcel size. Mountain areas, for example, need at least 5 acres.
To bring more growers into compliance, the county in May eased rules for those who use commercial agricultural land. Growers using greenhouses will no longer be required to go through a public hearing or notify neighbors.
Still, the Cannabis Licensing Office will continue to enforce local regulations as it acculturates to a legalized marijuana industry that generated $144.2 million in the second quarter of this year alone.
“We have a regulated market people need to get used to,” says Santa Cruz County spokesman Jason Hoppin. “This isn’t the Wild West. Those days are over.”