MENDOCINO Co., 1/23/17 — The California Growers Association, (CGA) a cannabis industry trade association, has filed a lawsuit against the California Department of Food and Agriculture (CDFA), over a regulation that allows one person or company to collect multiple cannabis cultivation license, effectively bypassing any caps on marijuana-farm size.
The suit was announced today and contends that the regulations established by the CDFA violate the intent of voter-approved Proposition 64 by creating a loophole that effectively allows an individual or company to grow an unlimited number of plants by holding an unlimited number of licenses. The CGA fears that without a cap on farm size, small and medium sized family farms would be driven out of the market by industrial scale weed, and contends that Prop 64 was designed to prioritize small and medium cannabis businesses.
The North Coast’s legislators, State Senator Mike McGuire and Assemblyman Jim Wood, also requested that the cap be reinstated in a December 4 letter to the CDFA.
A one-acre cap on the size of cannabis farms was included in the CDFA’s earlier drafts of the regulations, but was not present in the temporary regulations that were released in November. Prop 64 included a five year delay before allowing large scale licenses. The lawsuit alleges that the CDFA, “has promulgated a regulatory loophole that eviscerates the statutory five-year prohibition overwhelmingly approved by California voters.”
The CGA did not take a position on Prop 64. But they have circulated a petition over the last two months calling for the reinstatement of the one-acre cap that has received over 3,200 signatures.
Many counties that developed regulations prior to November do not allow cultivation licenses larger than one acre for an individual business. The largest cultivation permits allowed in Mendocino County under the current ordinance are 10,000 square feet, which many multi-generational family farmers supported in the belief that it would prevent large-scale farms from entering the market. The 1,000 plus member CGA began as cannabis farmers’ advocacy group based on the North Coast, but has grown into one of the largest statewide advocacy organizations for the cannabis industry.
The press release issued today states that the CGA board of directors unanimously approved the decision to file the lawsuit after almost two months of deliberation. "Generally we think the agency is doing a good job, this is not a broad complaint. Our concern is very narrow in scope, but the implications are huge," said CGA’s Hezekiah Allen.
In late November, the CGA held a packed meeting in Laytonville, designed to help cultivators learn about the new regulations, a few days after they were released to the public. At that meeting, Allen pointed out the removal of the cap, and intimated that a lawsuit might be forthcoming, joking "I hired more lawyers this morning than ever before in my life." In the press release issued today, Allen noted that the decision to file the lawsuit two months after the regulations were released came because, “we wanted to make sure we got it right."
The full press release is posted below, and you can read the full lawsuit here.
California Growers Association Files Lawsuit to Close Loophole in Cultivation Regulations
Sacramento - Today the California Growers Association, a California Non-Profit Mutual Benefit Corporation and the largest cannabis trade association in the state, filed a lawsuit challenging the California Department of Food and Agriculture's decision to allow unlimited stacking of cultivation licenses.
Proposition 64 was clear that it “ensures the nonmedical marijuana industry in California will be built around small and medium sized businesses.” Specifically Proposition 64 and its implementing laws are clear that small and medium sized businesses are provided five years to establish and transition their operations before the state may issue large scale cultivation licenses. Regulations recently adopted by CDFA, however, create a loophole by allowing a single corporation to obtain and aggregate unlimited smaller cultivation licenses to operate a cultivation site larger than the legal limit.
The decision to move forward with the lawsuit came after nearly two months of careful consideration and a unanimous vote of the CalGrowers Executive Committee. "We took our time with this because we wanted to make sure we got it right," Allen explained. "Generally we think the agency is doing a good job, this is not a broad complaint. Our concern is very narrow in scope, but the implications are huge."
Representing more than 1,000 cannabis growers and businesses in communities throughout the state, Allen said the consensus to move forward was clear: “Prop 64's five-year ban on large cultivation licenses was included specifically to account for many Californians' concerns that locally-owned and community-minded businesses would be replaced by a small number of powerful, consolidated corporations. Unfortunately, CDFA's regulatory decision allows these interests to quickly corner the market, while tens of thousands of small and mid-sized businesses are still working to fight local bans, raise capital, or establish operations in compliance with new rules. We could not stand by while a single regulatory decision threatened the future of so many hardworking Californians."
Despite the disagreement, Allen is staying positive. "Our government has checks and balances for a reason. We look forward to an opinion from the judicial branch to help settle this disagreement so we can move forward collaboratively and ensure as many businesses as possible are able to participate in the regulated cannabis market."
January 23, 2018, Kate B. Maxwell, [email protected]