A TROJAN HORSE!
A TROJAN HORSE! We were prompted to write this article by a picture and a story relating to the opening of a new California administrative office in the Times-Standard Building in the City of Eureka. [See State pot offices to open in Times-Standard building in Eureka] The opening of this office was a local political show. But to what end? A political show is important for those performing; for those attending; and in this instance for the City of Eureka. No one else really cares.
It is the implications of the event that are significant. This article will focus on some of those implications as the headline for the story is “STATE POT OFFICES TO OPEN IN TIMES-STANDARD BUILDING IN EUREKA.” The headline indicates the office opening is significant. We are always interested in California cannabis news. Will the opening of this office contribute positively to California’s roll-out of regulation or is this just another political show? The cast of characters in attendance provides some clues, although it is the impact the attendees are having, or not having, on California’s cannabis industry that will establish significance.
First, we want to explain the title of this article. The Trojan Horse analogy applies solely to the local officials and elected representatives who seem so pleased to welcome the agencies that are crushing Humboldt County’s cannabis industry to Eureka [See California Crushing Cannabis Industry]. For residents of Humboldt County, especially cannabis cultivators, a better analogy is the historic image of one of the three parts of Gaul welcoming a Roman division that has arrived to build a fort from which the division will bring peace and turn the local citizenry into second-class citizens of the Roman Empire who will thereafter be forced to survive on largesse from Sacramento.
The picture of the ribbon-cutting was somewhat of a surprise to us. Flanking the state and local representatives are Hezekiah Allen, who abandoned California Grower Association (“CGA”) in September of 2018, and Terra Carver, Executive Director of Humboldt County Growers Alliance (“HCGA”). What happened to CGA? [See Leaked internal document sparks questions over CA cannabis growers group’s finances, management] Eighteen months ago it was a political force in California. CGA now appears to be MIA. Hezekiah Allen now represents Emerald Grown. Emerald Grown is nothing more than Hezekiah Allen in an incorporated form!
A TROJAN HORSE!
HCGA was one of the step-children of CGA. Nate Whittington succeeded Hezekiah Allen as the Director of CGA – at least he temporarily appeared to do so. Nate Whittington is now the Secretary of HCGA. While we would like to know what happened to CGA, our real question is, Why is HCGA welcoming agencies that are crushing Humboldt County’s cannabis industry to Eureka? Can Terra Carver answer our questions? Can Nate Whittington answer our questions? So many questions! So few answers!
Let us look for a moment at administrative offices that have been established in the Times-Standard Building. Based on the article in the Times-Standard, the four regional offices that have been opened in Eureka are:
(1) Bureau of Cannabis Control (“BCC”);
(2) California Department of Food and Agriculture (“CDFA”);
(3) California Department of Public Health (“CDPH”); and
(4) Water Resources Control Board.
The identification of the offices provides limited assistance. The information relating to the Water Resources Control Board was both helpful and reasonable. The article explains that the State employees of this office will generally be working in the field with growers but office appointments can be scheduled. This makes a great deal of sense to us. Water usage is critical in California. Sound water policies must always be implemented at a local level pursuant to appropriate state and federal guidelines.
The explanation that tax payments can be made at this office also makes sense, although the California Department of Tax and Fee Administration (“CDTFA”), which collects taxes is not identified in the article as one of the four regional offices. Perhaps this was an oversight. We are uncertain why CDPH has opened an office in Eureka, but we assume it is for reasons comparable to those of the Water Resources Control Board.
A TROJAN HORSE!
We are almost as puzzled by the opening of regional offices by BCC and CDFA in Eureka as we were by the appearance of Hezekiah Allen at the ribbon-cutting. If dollars are the proper standard for measuring the level of business activity in California’s cannabis industry, BCC has no reason to have an office in Eureka. The entire cannabis production of Humboldt County measured by dollars is 2-3% of California’s total cannabis business activity. If BCC is going to open an office in order to have offices and employees close to business activity, BCC needs offices in the San Francisco Bay Area, in San Diego, and in Los Angeles. The participation of Lori Ajax in the opening of this office appears to be solely a political show.
The opening of a regional office for CDFA makes no sense at all unless, as we suspect, the article is not quite accurate. CDFA is a publically supervised Department of California’s administrative bureaucracy. CalCannabis is a small Division of CDFA. We suspect it is CalCannabis that has opened a regional office in Eureka. Hence our reference to the Gauls welcoming the arrival of a squad of Roman soldiers. It is our belief CDFA, as a bureaucratic Department that is overseen by a public Board, has no idea how badly CalCannabis has bungled its licensing of cannabis cultivation.
As we have described, CalCannabis has crushed much of the life out of California’s cannabis industry through the misapprehension of its role and its misguided approach to the development of state-wide regulation of cultivation. [See CalCannabis Licensing Debacle] One important cause of the bungling of CalCannabis is its failure to defer to the maximum extent possible to local jurisdictions on issues of land use and public health and safety.
A TROJAN HORSE!
We will continue to ask questions. When we ask questions we will suggest solutions We will continue to question until we are convinced California’s cannabis regulatory agencies have done everything possible to rectify their bungling roll-out of regulation.
As is usually the case, our expectations are very likely too high. All those who attended the ribbon-cutting for the opening of these new regional offices were pleased. They got their pictures in the local newspaper. The owners of the Times-Standard Building were pleased. They have a credit-worthy tenant. Why should we have expected more from the opening of a governmental office?
We will close with one anecdotal comment. We have spoken with only one person who sought assistance from these new offices – a consultant seeking information relating to the circumstances of a small cannabis cultivator. We were told the agency representative was friendly and singularly unhelpful. That is consistent with our experiences. The employees of California’s cannabis regulatory agencies have consistently seemed well-trained at being friendly, but singularly unhelpful. The problem, of course, is that the leaders of these agencies have misapprehended the mandates of Proposition 215 and Proposition 64.
The mandates of these two Constitutional Propositions called for California to transition its quasi-underground and underground cannabis industry into a regulated commercial medical and adult-use industry. California’s cannabis regulatory agencies have instead attempted to impose an ill-conceived regulatory scheme on California’s cannabis industry. These agencies have created turmoil. These agencies have also dramatically transformed California’s cannabis industry. They have not, however, successfully carried out the mandates of Proposition 215 and Proposition 64.
California’s cannabis regulatory agencies have crushed a substantial part of the cannabis industry that had developed in California over the past thirty years. These agencies have opened doors for legions of carpetbaggers. These agencies have caused the transfer of the leadership of the industry to a group of newcomers. These agencies have failed to efficiently transition California’s cannabis industry into a regulated commercial marketplace. Tax revenues continue to fall behind projections. California’s underground market does not appear to be shrinking. It is hard to find success stories in California’s roll-out of cannabis regulation.
We cannot see how the opening of offices in Eureka will make a significant contribution to rectifying the bungling of those who have guided California’s roll-out of regulation. California’s cannabis regulatory agencies thus far have caused, and are continuing to cause, far more damage than necessary and are accomplishing far less than they should through a lack of analysis and political grandstanding.
We will be writing much more!