Point of Focus: Cannabis Business in the First Months of 2018

Feb 6, 2018

The legal cannabis market in California debuted this year in 2018. Proposition 64 allowed for the Adult Use of Marijuana Act or AUMA.
Credit Cannabis Training University (Own work) [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

High hopes for the cannabis industry in Humboldt County continue to expand since the passage of Proposition 64 in 2016. 

The region has seen a shift in how cannabis business is handled and more than 2000 applications for permits, were filed since the law passed. As planned, the region finally debuted its first legal recreational cannabis market in California this year. 

Eureka's Industrial Approach

One area in particular that's hoping to advance on cannabis business is Eureka, a city that wants to focus its efforts on manufacturing cannabis products. 

“We’ve been working on this for years, so we don’t think of it as the first couple of months. We have over 50 businesses in the permitting process," Eureka City Planner Rob Holmlund said. "We’ve been working with them for more than 18 months. Some of them are operational and some are still getting permitted.” 

Holmlund also said that while the county has plenty of places for cultivation, Eureka is different and would benefit more by becoming a manufacturing hub for the rest of Humboldt.  “Compared to business creation and job creation in the city, this is the biggest surge of job creation and business creation that we’ve seen in decades," Holmlund said.   

Within the 56 applications in the city, 40 are currently active, 9 are in operation and 26 of those 56 applications have been issued or are working on other typed of permitting. And with this industry comes a plethora of new jobs.  

“Some people ask me, 'is it just transferring people out of the black market and into the legal market?'. It really isn’t doing that, it’s creating new jobs. In the county with thousands of farms submitting applications you know to be permitted, those are transferring from illegal jobs to legal jobs," he said.  "But in Eureka, we didn’t have any manufacturing firms, or distributors or testing labs. Those jobs just simply didn't exist, these are all new jobs and businesses, so in Eureka, it really is creating all new economic development.”  

While this region is not the only place in California for cannabis, Holmlund said it certainly can live up to its reputation.  

“Napa is seen as the premier wine growing area of California, but from what I understand, only about4 percent of wine comes out of Napa. So they have the reputation of a high end and high-quality wine that's grown in Napa. They have the prestige, but they don’t really grow the volume that the rest of the state grows. So Humboldt County doesn’t necessarily need to be the quantity of cannabis grown in California. Humboldt can be known as the quality of cannabis grown in California. Humboldt County has that reputation and can build upon that."

Zoning maps for cannabis business regarding manufacturing, dispensing, cultivation and transportation are available here.  

New and Changing Regulations

The market seems bright to many who are excited to start businesses and change from purely medical to both medical and recreational. But for Eskender Solomon, who works in the cannabis industry in Humboldt, the future of this field is daunting.  

Eskender Solomon:

“When they went from medical to recreational, or when they did a combo of the two is when they started to be really more concerned about what was in the plants, as far as doing testing," Solomon said. "It’s really funny when it was medical and not very much regulated there wasn’t much testing required for it. It’s really funny that now it’s a recreational item that they’re saying has no medical value that they’re even more worried about what’s in it. They’re upping the cost for testing and making it very difficult for people to exist in the business.” 

Others on the legal side are concerned about the implementation of local taxes on cannabis. Particularly, Eugene Densen, an attorney based in Alderpoint in Southern Humboldt.  

Densen says Measure S, which was voted in favor of establishing a marijuana cultivation tax per square foot, started out lawfully, but he says when the county changed part of the measure, it became an illegal law. Densen sent a letter explaining to the County Board of Supervisors why he thought the measure was unlawful but also says he has yet to get a response from them.  The changes, according to Densen, have to do with the amount a person is taxed. Prior to one of the changes, if a person had 10,000 square feet but only used 6,000 for cultivation then they would only be taxed for the amount they use. Now they’ll be charged for the full 10,000 square feet.  

“In California, all taxes have to be approved by the voters. When they wanted to do this cannabis tax, they put Measure S on the ballot. And Measure S passed," Densen said. "The thing about that is, that once they’ve passed, you can’t change them because the voters have put this in. You can make small changes, sort of procedural changes, but you can’t change what’s taxed, and who is taxed or how much the tax is, and those are the things that they changed.”  

Measure S states that the tax rate shall be adjusted annually by the Consumer Price Index and revenue from the tax will be deposited in the County General Fund. The tax is set to remain until it’s repealed.

Additionally, the tax may be repealed or amended by the Board of Supervisors in a manner that doesn’t result in an increase in the amount of tax or broaden the scope of the tax without voter approval. More information is at Ballotpedia.com.    

Dennis Peron - The Legacy of an Activist

Dennis Peron in Eureka with his dog Taffy.
Credit Laura Costa

And now we move to highlight the life and legacy of Dennis Peron, who passed away in late January. He was 72 years old and suffered from lung cancer. Peron was known to many as the father of medical cannabis and co-authored proposition 215 in 1996.

“Prop 215 let a little light into a room. It was dark for a long time so people couldn’t see out and that light was hope, hope that our country can live up to its dream and that we can be a free people," Peron said in a 2016 interview that took place in Humboldt County with KMUD's Isabella Vanderheiden.  

While marijuana is something Peron was famous for, he was also a Vietnam War veteran, an activist during the AIDS epidemic and a gay man living in the fear of persecution during the summer of love in the 1960s.

He advocated for the use of medical marijuana to help people suffering from AIDS and chronic pain. Peron lost his own partner, Jonathan West, to AIDS in 1990.  

A friend to Peron and resident of Humboldt County, Laura Costa said he was pivotal in the decriminalization of marijuana and that he was the most generous and kind-hearted person she’s ever met.  "He made people 

want to be a better person, you know after you've talked to him for a little while. Generally, the kind of people that we'd bring around Dennis are the kind that want to be a better person every day anyway," she said. "We think that Dennis can influence just as many people in his absence now if we just use the right opportunities to inform and educate people about what this man was about and what he did with his life and how there are very few like him these days."  

Costa also said Peron was unlike most famous historical figures and lived on the bare minimum, only buying a new pair of shoes every once in a while. She said he would frequently give away money and marijuana from his farm in Lake County to anyone who asked for help.   "We could sure use a bit more heroes, right? How many heroes are there among our peers? Maybe we just don't know who the heroes are until they get a little bit older, but this guy was doing it back in the day and he lived his whole life that way," Costa said.  

While talking with Costa, she read a poem written for Peron about his life, love and legacy: 

The Phoenix is mortal, he is released from his pain.

His spirit has left him, his body remains.

His lover awaits him, since '90 he has rest.

Not once has he forgotten the arms of Jonathan West.

And if there truly is a heaven up above,

I know that for Dennis it is the summer of love.