www.montereycountyweekly.com JULY 13-19, 2023 MONTEREY COUNTY WEEKLY 25 of an “unlawful cannabis operation” in rural Salinas that saw authorities confiscate and destroy over 1,400 pounds of marijuana. Though the grower in question held the requisite licenses and permits, they were not reporting cultivation activities to the county or state, according to the DA’s office—potentially enabling them to avoid paying taxes, testing fees and other costs on that product. Monterey County Assistant District Attorney Greg Peterson says the danger of such illegally grown cannabis is evidenced by the fact that subsequent lab testing of the seized product found “a number of harmful chemicals,” including arsenic. Yet even that case study speaks to the regulatory pressures felt by the legal industry. CannaCruz’s Palmer estimates that the “same lab test” for cannabis products has become around 10 times costlier since Prop. 64, due to enhanced requirements placed on labs. Despite the various headwinds, some in the industry see green shoots of optimism. There are signs that the market for greenhouse-grown cannabis is ticking upward to around $650 to $750 per pound, according to Roach— though he notes that the market could shift again, such is the nature of any cyclical agricultural product. In June, the county’s Planning Commission signed off on a new state rule allowing greenhouse growers who don’t use grow lights in their facilities to apply for outdoor cultivation licenses, which are cheaper than the mixedlight cultivation licenses those growers were having to apply for. Still, many note that the local industry is beset by debt, back taxes and unpaid bills between growers, distributors and dispensaries alike—many of whom don’t know if they’ll ever receive what they’re owed due to the precarious financial situations of those they’re doing business with. “We’ve made a huge shift in our business,” Michelle Hackett says. “We’ve stopped all of our retail relationships. It’s all wholesale, cash on delivery…We’re not in the business to extend credit or give free weed— we’re in the business to sell weed for 100-percent marketable value.” Long term, Hackett believes that the way forward for the industry is to open up cannabis retail options to pharmacies, convenience stores and other conventional outlets: “We need triple or quadruple the amount of legal outlets,” she says. And while federal legalization would raise the possibility of a national market flooded with product, she thinks California cannabis would prosper—not just because of its established infrastructure but because it connotes quality, akin to Napa Valley wine. Kogan adds that the current state of affairs is an opportunity for state and local governments alike to make structural reforms to how they regulate the industry. “I think this is a morphing period,” he says. “This is probably an opportunity for regulatory structures to realize that they got caught up in a ‘green rush’ hysteria and poorly regulated without a long-term view. Monterey County did not take the long view.” 32 The number of Monterey County cannabis businesses that went out of business in the 2022-23 fiscal year— twice the number that folded over the previous two years combined. $82 million The amount of commercial cannabis business tax revenue collected by Monterey County since it legalized recreational cannabis businesses in 2016. Annual tax revenue slowed down to just $3 million in the 2022-23 fiscal year. $1.92 million The amount of back taxes owed to the county by cannabis operators, under payment plans created for those struggling to meet their tax liabilities. $618 million The total value of cannabis products produced in Monterey County in 2021 (the most recent data published by the county Agricultural Commissioner’s office). That figure increased from $484 million in 2020, despite declining per-unit prices, due to greater production. BEST SUMMER EVER! THE CITY OF MONTEREY FOR MORE INFO + REGISTRATION MONTEREY.ORG/REC OVERNIGHT CAMP DAY CAMPS TODDLER CAMPS SPORTS CAMPS AND MORE! REGISTER NOW SCAN ME!
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