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High Expectations for Sonoma County Pot Industry

Like an ocean liner emerging from the fog, Sonoma County’s marijuana industry is being recognized as a potentially lucrative economic force with immense promise.

Just how lucrative, though, is difficult to quantify.

By one estimate, more than 60,000 adults in the county — equal to the population of Petaluma —are regular consumers of a minimally regulated and still largely illegal commodity that could account for about $126 million in cannabis product sales a year, said Terry Garrett, co-manager of Sonoma County Go Local, an alliance of businesses, nonprofit organizations and government agencies.

Garrett issued his estimates this week at a forum to examine the impact of California’s changing pot laws on Sonoma County. About 150 public officials, marijuana entrepreneurs and others attended the forum at the Sonoma Mountain Village Event Center in Rohnert Park, including Supervisors Susan Gorin and Efren Carrillo, members of the ad hoc committee developing the county’s marijuana regulations. Agricultural Commissioner Tony Linegar was one of five panelists at the Cannabis Impact program.

“We’re here at the transition of an industry,” said William Silver, dean of Sonoma State University’s School of Business and Economics, who prefaced his remarks saying the school’s lawyers had asked him to disclaim his connection with SSU.

Legalities

State officials are busy establishing the framework for medical cannabis regulations set by law to take effect in 2018, while California voters have the chance in November to legalize adult recreational use.

There are about a dozen medical marijuana dispensaries in the county, operating in a legal gray area. Santa Rosa is, so far, the only jurisdiction granting cannabis cultivation permits under the Medical Marijuana Regulation and Safety Act approved by the Legislature last year.

Linegar said the county is considering rules for the size of permissible marijuana-growing operations and the zoning districts where they would be allowed.

“We want something that is reasonable and creates opportunity,” he said, indicating the county will take “incremental steps” toward allowing cultivation rather than being “overly permissive out of the gates.”

Linegar said he expects the county will accommodate up to 200 acres of medical cannabis cultivation, which he contrasted with 63,000 acres of wine grapes.

A 2,500-square-foot outdoor garden is commercially viable, said Hezekiah Allen, executive director of the 700-member California Growers Association, a trade group representing marijuana growers. There are about 53,000 marijuana grows in the state, employing about 280,000 people, he said.

Tawnie Logan, executive director of the Sonoma County Growers Alliance, said 70 percent of the local grows are less than 3,000 square feet, most of them located in residential zones.

What’s Happening In Colorado

John Tayer, president and CEO of the Boulder, Colo., Chamber of Commerce, urged the county to climb aboard the weed train.

“This is a great opportunity for your community,” he said. “Embrace it 100 percent. Treat it like a business.”

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Jake Donham removes some of the marijuana clones for quality control at the Peace in Medicine Medical Marijuana Dispensary in Santa Rosa on Friday, January 3, 2014. (photo by John Burgess/The Press Democrat)

Colorado reported $1 billion in legal pot sales last year, and Boulder County, a liberal area, has reaped $8.4 million in sales tax revenue since marijuana stores opened in 2014. About one-fifth of the warehouse space in Boulder is filled with grows, Tayer said.

Tayer said there was “no definitive evidence” that legalization had increased youth exposure to marijuana, nor evidence that a “strong black market” remained.

He acknowledged Colorado had not solved the “banking problem” and that pot continued to be a “cash-rich industry” because federal law prohibits banks and credit unions from taking marijuana money.

In fact, Tayer said, he knows a grower who buried a railroad car on his property and “throws money into it.”

In an interview, Garrett said he crunched data from numerous sources to estimate the number of cannabis consumers and scope of the industry. He calculated $2 billion worth of marijuana production and processing, equal to nearly one-tenth of the county’s $24 billion in economic activity.

The Sonoma County Economic Development Board hasn’t been able to quantify the local pot market, said Al Lerma, the agency’s program manager. “It’s an industry still in the shadows,” he said.

Steve Cochrane, managing director of Moody’s Analytics, said his firm has had the same problem.

“It’s really difficult to get any reasonable data on the industry,” he said.

You can reach Staff Writer Guy Kovner at 707-521-5457 or guy.kovner@pressdemocrat.com. On Twitter @guykovner.

This article was first posted here http://www.pressdemocrat.com/news/5983178-181/high-expectations-for-sonoma-county?artslide=0

Featured photo: Sonoma Patient Group in Santa Rosa. Credit: Christian Kallen for the Sonoma Index-Tribune