When California legalized adult-use cannabis in November 2016, it set off a chain of events meant to end prohibition. Over the past two-plus years, regulators have grappled with the gargantuan undertaking of bringing an estimated $5 billion industry from the black market to the light of day.
In Carpinteria Valley, where farmers saw an opportunity to put the new crop in existing greenhouses, a regulatory framework at both the county and state levels has finally reached its full scope. The resulting rules hold property owners and cultivators to account, and in many ways, to strict standards that have never before applied to agriculture.
“Cannabis is the first crop type ever regulated,” said Santa Barbara County Deputy Director of Long-Range Planning Dan Klemann. “We never regulated what is grown in greenhouses. Some farmers see it as a significant change and worry that it’s a slippery slope toward regulating other crops.”
Santa Barbara County’s cannabis land-use regulations for Carpinteria Valley gained final approval in late 2018, a step that has now opened the door to county inspections at cannabis farms. In order to acquire county business licenses, farms are now clearing county land use permitting. Representatives from county building and safety, as well as zoning, among others, will all need to sign off on applications before farms can begin to apply for business licensing, a prerequisite to annual state licensing.
“The concept of bringing cannabis operators into the light focuses on the bad actors and getting them out,” said Klemann. “Then we can bring the good actors into the enforcement environment.”
The major difference for building and zoning codes for cannabis versus other crops lies in security and odor control. Santa Barbara County Supervisors did not grant cannabis farmers the “right-to-farm” privilege, meaning cannabis can be more tightly regulated than any other crop in the county.
“We felt that it was really important to hold growers accountable to the community and if we had given them ‘right-to-farm’ status that would have been very difficult to establish,” said First District Supervisor Das Williams. “It was a conscious decision by the county to make sure that we had better control of the situation. And, this was supported by many folks in Carpinteria, including the Carpinteria Valley Association. To me, the fact that people are coming in for permits is a good thing because it means that we can hold the growers more accountable to the rules.” Permitting requires growers to sign their name to statements that if found to be untrue, could lead to criminal charges of perjury and more. “If they lie on that permit, they can be held accountable criminally,” Williams stated.
Cannabis operators must open the doors
The other big change for cannabis farming is proactive enforcement. Farmers cultivating cut flowers or avocados operate under a reactive, complaint-driven enforcement model. If a neighbor complains, then the appropriate regulatory agency will call the farm and begin an enforcement inquiry.
With cannabis, the District Attorney’s Office, the Sheriff’s Office and the County Executive Office are looking for violators and will be enforcing as a means of bringing the new industry into compliance. The county taxes cannabis cultivators at 4 percent and uses that money to pay for enforcement.
“We are coordinating enforcement more than any other industry,” Klemann said. Whereas greenhouse farmers growing flowers or vegetables can operate under-the-radar, those choosing to cultivate cannabis are subject to visits by regulators at both the county and state level and must bring all structures, plumbing, electrical and more into compliance.
“What we’re finding in a lot of these applications,” added Williams, “is that the reason they are taking a while is that they are cleaning up things that predated marijuana— unpermitted buildings and so on.”
State licensing versus county permitting
The State of California will not issue annual licenses to cannabis cultivators unless they get local permits. As of now, the county is processing 19 applications for cannabis cultivators in Carpinteria Valley and only approved one as of yet, according to Santa Barbara County Cannabis Program Supervising Planner Petra Leyva. Those can take six months or more to process.
Legally operating cannabis farmers can get state provisional licenses while navigating the county process if they were grandfathered in under the old medicinal cannabis model, which no longer exists. Now the only way is to comply under all county and state rules for adult-use.
When the state licensing database shows that a cultivator has a provisional license, it does not mean they’ve met all the county requirements. In Carpinteria Valley, state provisional licenses have been granted for adult-use cannabis to 14 companies (many of which have been issued multiple licenses): Arroyo Verde Farms, Twisted Roots Inc., Saga Farms, Flora Coast Inc., Orbiter Blooms, CVW Organic Farms, Mission Health Associates Inc., CKC Farms Inc., Life Remedy Farms, New Horizon Farming, Ocean Hill Farms LLC, ST Management Group LLC, Autumn Brands LLC and CP1 Supply Systems Inc. The state has issued provisional licenses to four medical-use cannabis operations: Ednigma, Bosim 1628 Management LLC, Olivella Inc. and Autumn Brands LLC.
The county, on the other hand, has so far only approved one Coastal Development Permit (CDP) for cannabis cultivation—G&K Farm/K&G Flower owned by Graham Farrar, CEO of Glass House Farms.
“The state and the county have brought a lot of new oversight and scrutiny that doesn’t exist in any other agriculture and has never existed in cannabis before,” said Farrar. “It’s certainly a challenge and requires a lot of work and additional expense, but we do appreciate having a set of rules to follow so that we can continue to farm and supply the newly legal California market.”
After a two-year CDP is issued, the county’s compliance division will monitor the operation periodically to ensure that the business “is doing what they said they’d be doing,” said Leyva.
All agencies on deck
Once a cannabis cultivator gets through land use inspections, it can get a business license, but must first satisfy the offices of the agricultural commissioner, sheriff, DA, APCD, fire and health and safety departments before the county executive office will issue a business license.
Those local agencies are in addition to state agencies reporting to Calcannabis, a new department set up to regulate cannabis cultivation under state food and agriculture. The California Department of Fish and Wildlife has regulatory authority over streams, waterways and environmental impacts of cannabis cultivators on both water and wildlife; the Central Coast Water Quality Board regulates runoff from properties, among other things.
In terms of business licenses, “we haven’t seen one cannabis operation make it through zoning and on to getting a business license,” Kelmann said. “Some members of the public are confusing the state provisional license with what the county is doing. (The county is) working to get legal farmers to comply with very strict regulations to address adverse effects.”