The passage of Proposition 64 and Measure E has proved to be a brief high for those supporting recreational marijuana.
The state proposition (legalizing recreational pot) doesn’t become effective until January 2018, while the Santa Cruz County measure (a tax on all cannabis activities) has been put on hold by the county Board of Supervisors until at least the end of this year.
With mail ballots still uncounted across the state, both issues had comfortable margins, with Proposition 64 at 56-44 percent, and Measure E at 80-20 percent.
Meanwhile, a labyrinth of new rules, regulations and permitting processes must be created and then navigated by the public, growers and dispensaries.
“We’re going from a black market to a white market,” said Jeff Angell, president of Creekside Collective, a 2-and-one-half-year-old pot dispensary in Boulder Creek. “There will be some hiccups.”
Just one week after 7-percent tax bills were mailed to growers, manufacturers and distributors, an uproar before county supervisors on Nov. 15 resulted in a 45-day moratorium on the measure. A public hearing before the board on Tuesday, Dec. 13, may extend the tax moratorium for further study.
Newly-hired county Cannabis Licensing Manager Dan Peterson has been charged with overseeing a new, legitimate pot environment that not that long ago was solely used in backrooms and alleys by beatniks and musicians.
One of his first duties has been to bring the nascent community of growers into the public fold. Farmers began taking preliminary steps toward going legit in September when they registered online with the county. To date, 950 farmers have paid $500 each and submitted their information. The window closes for applications Nov. 30.
“I think it’s safe to say that there are more than 950 cultivators in the county,” said Peterson, who is currently hiring a team of four code-compliance officers. The group represents experts in environmental resource planning, building codes and zoning.
After growers pass a background check, there will be a site visit and a $2,500 licensing fee. Peterson let it be known that he’s an expert at ferreting out illegal grows, having learned his craft while enforcing marijuana laws in Yuba City.
While a draft environmental impact report (EIR) may take 8 to 10 months to reach completion, growers only have a year’s grace to come into county compliance.
Using Google Earth views, state flyovers and neighbor complaints, the county will not abide by illegal growers. “I’m not going to wait. I’m going to go get ‘em,” Peterson said.
Proposition 64 allows adults 21 or older to possess, transport, purchase and use up to an ounce of dried marijuana and 8 grams of cannabis concentrate, or grow up to six plants indoors.
Those with prior marijuana-related convictions can petition the court to have their records cleared to reflect newer laws.
There are currently 13 pot dispensaries in the unincorporated areas of the county, one in Santa Cruz and one currently engaged in the permitting process.
The City of Scotts Valley adopted an ordinance in 2011 to prohibit pot dispensaries. It is, however, legal to have medical marijuana delivered to Scotts Valley.
Small pot boutique dispensary owners are wary that the market may become saturated with huge, out-of-county grows that undercut their ability to make money.
“It will be a boom and bust,” said Creekside Collective’s Angell, referring to big growers’ efforts to profit from local customers.
“Those (corporate growers) left standing in the mountains won’t be our friends.”
Peterson has a more upbeat attitude toward potential competition among cannabis capitalists and collectives.
“Local boutiques will be able to compete and exist,” he said, adding that organic grows and strains that target specific illnesses will separate the products.
“It’s the difference between Budweiser and a microbrewery.”
One unclear aspect of state legalization of pot is federal law, which supersedes local statutes, and how it will be interpreted. President Obama directed the attorney general to take a hands-off approach to state marijuana laws.
It is unclear what direction President Trump will pursue after he takes office in January.
Peterson predicts that no matter what occurs in the short term, it will take the federal government at least eight years to loosen up its overall policy and remove marijuana from the same category as heroin.
This means dispensaries will still have the inability to legally bank their earnings, take credit cards or even get the advice of a certified public accountant regarding weed profits.
This means dealing strictly in cash, which is limiting for customers and can be dangerous for owners.
“(A change) in the banking situation is long overdue,” said Angell, who has a special, costly arrangement with a local bank to treat his business as a regular merchant.
“But there are certain risks that come with the territory.”
