California’s largest cannabis farmer organization has filed a lawsuit against the California Department of Food and Agriculture’s decision to not limit marijuana farmers to 1 acre.
The California Growers Association’s civil litigation filed in the Sacramento County Superior Court this week claims the state’s cannabis laws clearly spell out the intention to limit the regulated pot market to small- and medium-sized farms — which the group claims are grows of 1 acre or smaller — until 2023.
The association’s executive director Hezekiah Allen said Wednesday that they have exhausted every other option including meeting with state regulators and staff from Gov. Jerry Brown’s office during the past few months.
“Our government has checks and balances for a reason,” Allen said, “and it is an appropriate time for the judicial branch to weigh in and provide an interpretation of state law.”
State regulators contend that a cultivation cap was never mandated in the laws.
Without the cap, the growers association claims the state will allow larger corporate grows to outcompete small- and medium-sized farms at the outset of the fledgling legalized market, which opened Jan. 1.
Allen said the state Department of Food and Agriculture violated the intent of the state’s cannabis laws in November when it limited the number of 1-acre grow licenses to one per person or entity, but still allowed people to apply for multiple licenses for smaller grow sizes, thereby creating a “loophole” to allow a person to grow more than 1 acre.
The lawsuit is calling for the court to prohibit the state from issuing small cultivation licenses in cases in which the applicant’s grow size would exceed 1 acre. The lawsuit is also calling for the court to award attorneys’ fees, costs of the suit and any other relief it deems proper.
“It doesn’t matter which licenses you have to get there,” Allen told the Times-Standard. “What matters is the regulated market was intended to be built by small- and mid-size businesses.”
Allen said without these limitations in place, the industry may produce more cannabis than the demand, thereby harming the industry and particularly small farmers as prices drop.
“The bottom line here is until out of state sales are authorized, until federal policy reform takes place, our marketplace is going to be artificially constrained on the demand side, meaning we only have in-state consumers,” Allen said. “As long as that’s the reality, best for state to constrain the supply side.”
Allen said the grow size limit is clearly spelled out in Proposition 64, the November 2016 ballot measure also known as the Adult Use of Marijuana Act that legalized recreational cannabis in California:
“The Adult Use of Marijuana Act ensures the nonmedical marijuana industry in California will be built around small- and medium-sized businesses by prohibiting large-scale cultivation licenses for the first five years,” the proposition’s text states.
The California Department of Food and Agriculture and another industry group, the California Cannabis Industry Association, have previously argued that the state’s cannabis laws have never mandated capping farmers to 1-acre grows.
“A 1-acre canopy limit has not been in proposed regulations at any point and was not included in the emergency regulations due to the fact that Proposition 64, the law guiding the process, did not provide authority to include it,” California Department of Food and Agriculture spokesman Steve Lyle wrote to the Times-Standard in December. “However, local jurisdictions may impose that limitation on their own if it meets the needs of their constituents.”
Reached Wednesday morning, Lyle said the department has nothing further to add about the cap.
Cultivation limits have changed in the two years since the state began to regulate its marijuana industry.
The state’s medical marijuana rules adopted in 2015 through the Medical Cannabis Regulation and Safety Act, did not allow a person to grow more than 1 acre of cannabis with exception to a dispensary license that allowed up to 4 acres of cultivation. Proposition 64 did not impose a cap on the number of cultivation licenses, but prohibited the state from issuing licenses for grows larger than 1 acre until 2023.
The state Legislature merged the medical and recreational laws together last year through Senate Bill 94, which also did not include a 1-acre cap.
State legislators including North Coast Sen. Mike McGuire and Assemblyman Jim Wood are set to participate in committee hearings in the coming months to discuss potential changes to the state’s cannabis laws, including the implementation of a 1-acre cap.
Last month, the two Healdsburg Democrats called for legislative hearings to discuss implementing the cap.
The Assembly’s Agriculture, Health, and Business and Professions committees are set to hold a joint meeting on Feb. 20 in Sacramento to discuss cannabis regulations. The Senate Governance and Finance Committee is set to hold a March 1 meeting in Ukiah during which the grow cap will be discussed, according to Kerrie Lindecker, McGuire’s communications director.
The California Growers Association’s Humboldt County branch, the Humboldt County Growers Alliance, deferred all questions on the lawsuit to the association.
Will Houston can be reached at 707-441-0504.