Mendocino Cannabis Alliance
Supporting Small Farmers During Challenging Times
by Dawn Emery Ballantine
As a community, as a county, and as a magazine publication, we are concerned with our farmers. We want to know where our food comes from. We want assurances that our farmers are paid a living wage just as they provide for our sustenance. We want to know that we are not buying from large corporate farms that put smaller folks out of business. This holds true for both the food farmer and the grape farmer. Now Mendocino County has the cannabis farmer, at long last recognized to farm within the law. But these farmers are barely surviving in today’s market.
The cannabis industry struggles with not just labyrinthine legalities and usurious taxes, but also with a deep and persistent stigma. In 2016, California’s voter-approved Proposition 64 legalized cannabis cultivation, distribution, and sales with exceedingly strict regulations. The law gave the 58 California counties the right to establish their own local policies and regulations for cannabis retail, manufacturing, and cultivation, but just over half of California counties continue to refuse permits for legal cannabis businesses. After Proposition 215 supporting medical marijuana was passed in 1996, there were approximately 10,000 cannabis retailers throughout California. Today, after Proposition 64 and the newly licensed recreational market, there are only roughly 1,500 cannabis storefronts licensed in the entire state. In a population of 39.3 million covering nearly 164,000 square miles, that doesn’t amount to much.
To make matters worse, wholesale prices have plummeted. Exploring the reasons for the market collapse would require a whole series of separate articles. Suffice it to say, that collapse inspired the creation of an organization to address its impact on farmers—and the cannabis industry as a whole—in Mendocino County.
Mendocino Cannabis Alliance (MCA) aims to serve as the voice of the local cannabis community. It represents over 140 individual businesses, from the smallest cannabis cultivators to distributors and retailers. “Our mission is to serve and promote our cannabis operators through education, public policy initiatives, and sustainable economic development,” said Michael Katz, Executive Director.
MCA was created in 2019 by unifying two existing local trade associations, one focused on economic development and the other on policy advocacy. Michael was initially a board member, but he was hired as MCA’s Executive Director in November of 2020. For the first eight months, their focus was exclusively advocacy because of proposed policy changes, but their focus has since shifted to helping the local industry survive the current—and somewhat hostile—environment.
Operational licenses in Mendocino County have dropped from a high of 1,200 licenses in 2020 to fewer than 800 today. Complications of legal compliance, in addition to new cannabis cultivation in areas that previously had none, have led to product oversupply. Though Prop 64’s regulations specified a 1-acre cultivation cap per licensee for the first five years, many local jurisdictions circumvented this limit by “stacking” smaller licenses. One farm in Santa Barbara currently cultivates 5.5 million square feet of new cannabis canopy—more than 100 acres for one grower. In contrast, Mendocino County has licensed only approximately 290 acres of growth in the entire county. Michael explained, “Two or three farms in Santa Barbara produce more licensed cannabis than the entire county of Mendocino [by utilizing licensing loopholes].”
With such a huge oversupply of product, particularly in Southern California and backed by substantial corporate money and resources, the prospects look bleak for our local farmers. Once upon a time, a cannabis farmer could charge $800 to $1,200 for a pound of high quality, sun grown cannabis. That price is now down to roughly $400-500 per pound. The reality is that farmers cannot survive at that pricing.
Michael explained, “Retail is really the key to generating the revenue, the market value, of these products. And [the difficulty is] trying to figure out how to capture as much of that market share for our community as possible, given the reduced number of retailers, massive oversupply, and that we have a struggling community, financially under-resourced and challenged by the entire system and cost structure of compliance and bringing product to market.”
So the MCA brought its leadership together to create MendocinoCannabis.shop—a new venture which is perhaps the only one of its kind in the state. The idea is to utilize people and businesses within their existing licensed infrastructure to create a direct-to-consumer pipeline that would enable farmers to retain more value from each sale of their product. According to Michael, “We’re one of the only groups—if not the only group—taking this specific approach to retail as a trade association, bringing together our members’ resources and combining them to enhance the efforts of the entire community and derive value for everyone.”
It works like this: Brandy Moulton, an MCA member and CEO of Sovereign, a business in Fort Bragg, also has a licensed cannabis delivery service in Sacramento and Butte Counties, a competitive market with lots of big money cannabis businesses competing for attention. Brandy offered her license as the MendocinoCannabis.shop platform to bring other MCA members’ products to market in Sacramento. Local cannabis distributors—Mendocino Cannabis Distribution of Laytonville, Madrone from Fort Bragg, and The Bohemian Chemist in Anderson Valley—assist the project by getting product from small cannabis farms to a centralized location, where the products can be transported to Brandy’s facility for sale in the larger Sacramento market.
MendocinoCannabis.shop currently showcases over 25 craft farmers from Mendocino County, with more to be added soon. With their tagline “Cannabis with a Conscience,” the group promotes these products to people who tend to seek and purchase value-aligned products, in this case focusing on craft cannabis that is coming from small independent farms. They hope to help consumers understand the need to provide living wages to these farmers, and the way that we can do this as a broader society is by enabling them to retain the most value possible for their products.
Brandy’s own business website also features products from participating farms. The sales system which Brandy uses—Dutchie—has its own infrastructure and platform, so anyone who looks up Sacramento cannabis delivery will find each of the farms listed there as well. Customers can order from the websites, and the orders go directly through Brandy’s team for fulfillment. Most importantly, Brandy’s company only applies a 10% markup to cover the administrative costs of running the program. The farmers thus retain 90% of the pre-tax price for each product. For a $25 sale of 1/8 ounce of packaged flower including taxes, the farmer in this program is getting $17.90 per sale, or nearly $2,300 per pound. “Selling their packaged flower to other licensed shops not in the program, these farmers would be getting closer to half that price for the same product,” explained Michael.
MendocinoCannabis.shop launched in early March, 2022, after more than six months of discussion and planning. At the time of this writing, the program has shown good sales with month-to-month increases, new customers, and happy repeat customers. Perhaps equally important, they have been doing what they can to make their presence known in the broader Sacramento community. All participants contribute to a shared budget for marketing and engagement with boots-on-the-ground connections. They have recently received positive coverage in the Sacramento Bee, Cannabis Business Times, and Ganjapreneur.com, showcasing this effort as a unique response to the current market crisis.
MCA is also in conversation with retailers in other parts of the state, with the idea that curating a suite of Mendocino cannabis offerings for those outlets could also provide more of a return for our farmers. MCA continues to work as a community to try and create solutions, and Michael noted that they’re “seeing like-mindedness” among other folks looking to provide resources for the smaller farmers. One possible solution was recently introduced by Assembly Member Jim Wood, with AB 2691, which would enable small farmers to be licensed to sell directly to consumers at a limited number of events per year, in an effort to help them retain full value of their product. (This is like the farmers market model, where growers set up and sell directly from their own tables.)
MCA represents over 140 individual businesses, but the organization has just one paid staff member—Michael Katz. Though they do have a number of dedicated volunteers who staff the board and various committees, their goal is to bring in more local cannabis community members to support the efforts for policy and market access. As Michael shared, “We really are stronger together … With all the challenges in the market and the diminishing resources, we really do need more support from the community and from any quarter we can find it in to continue our efforts.”
MCA would also love to bring on local non-cannabis businesses who are interested in sponsoring and supporting the local cannabis community. Michael said, “I’m cautiously optimistic about the future … We operate in the best interest of our members, which is the best interest of the broader cannabis industry in Mendocino county.”
Michael’s ultimate vision is to see Ukiah, Laytonville, and Willits become like “the Napa Valley for cannabis” over the coming decades. But he believes the groundwork has to be laid now, with concerted efforts made to ensure that operators survive the licensing process, giving them the time and support to find financial stability and create a strong infrastructure. The opportunities for cannabis tourism are abundant here like nowhere else, and MCA has recently collaborated with Visit Mendocino County, producing a video which came out in early June. Michael believes that this collaboration is the beginning of many and bodes well for the future of people and entities working together to recognize the value cannabis can provide to our community.
The small cannabis farmers in Mendocino County are here, trying to do the right thing under the new laws. Current economic hurdles are huge and are threatening their survival. Given the world we live in, thoughtful people have taken on the challenge of addressing inequities and overcoming prejudices and stigma for the good of our cannabis farmers and for Mendocino’s economy as a whole.
A Brief History of Cannabis in California
1795 Cannabis cultivated for fiber and rope in California. Two-thirds of it is grown on the missions.
1807 California produces 13,000 lbs of hemp, increasing by 1810 to 220,000 lbs grown.
1895 Cannabis grown in California for recreational use, reportedly by Arabs, “Hindoos,” Armenians, and Turks as hashish.
1913 Possession prohibited as part of the general prohibition act for alcohol.
1914 One of the first cannabis drug raids occurs in the Los Angeles area.
1925 Possession punishable by up to 6 years in prison.
1937 Cultivation becomes a separate offense.
1954 Harsher sentences put in place, including a minimum 1-10 years in prison for marijuana possession and 5 -15 years with a mandatory 3 years before eligibility for parole for selling. Life imprisonment allowed for people with two prior felonies.
1960s Legalization efforts begin.
1972 California is the first state to try to legalize cannabis by the ballot initiative Proposition 19, which is defeated.
1991 San Francisco Proposition P requests California legislature to legalize medical marijuana.
1993 California legislature makes joint resolutions requesting the Federal government to legalize medical marijuana.
1996 California is the first state to enact a medical marijuana law—the Compassionate Use Act, Proposition 215—which makes it legal for people and their caregivers to grow and possess cannabis for their own personal medical use with physician approval. Includes edibles, hashish, and concentrates. Transportation later included (SB420) as well as the establishment of medical cultivation cooperatives. Cannabis for medical use is not subject to CA sales tax.
2010 Proposition 19 introduced again to legalize cannabis, and again defeated.
2010 79% of US cannabis comes from California.
2016 Proposition 64 legalizes the possession and cultivation of cannabis for adult (over age 21) recreational use and reduces criminal penalties by authorizing dismissal or re-sentencing of existing cases of marijuana-related convictions.
Today “... the FDA and DEA have concluded that marijuana has no federally approved medical use for treatment in the U.S. and thus it remains as a Schedule I controlled substance under federal law.”
Visit The Shop online at www.MendocinoCannabis.shop
MCA can be found at www.MendoCannabis.com.
All photos courtesy of Mendocino Cannabis Alliance