A few years back, the citizens of our state went to the polls and voted to legalize recreational marijuana. This ended a number of injustices, the worst of which was long prison sentences for users and sellers of a fairly benign intoxicant.
Unfortunately, it also initiated a Gold Rush-type situation that is having significant unintended consequences in many areas of the state. Locally in Yolo County where we farm, the county supervisors initially passed an ordinance regulating marijuana cultivation that was far less restrictive and expensive than other counties. That drew in investors from all over the country who pushed the price of farmland up dramatically. Pot growers quickly overwhelmed the small staff at the Agriculture Department who were tasked with doing inspections, approving permits, collecting the taxes and every other regulatory task that the legislature had outlined for pot growers. (We now have a moratorium on new applications for marijuana farms).
At a recent meeting I attended, the county Ag Commissioner joked that he might have to rename his department the “Pot Department” before very seriously stating that for the foreseeable future the marijuana now grown on less than .01% of farmland in Yolo County will be occupying the majority of his staff’s time.
Among other tasks that the Ag Department staff will have less time to do: regulating pesticide use on the rest of the farmland in the county and monitoring for destructive invasive pests.
I”m betting the pot Gold Rush may be short-lived. The only reason for marijuana’s historically high price has been the fact that it was illegal to grow it. California already grows three times as much as it uses, and it remains illegal to ship out of the state — a situation which is not going to change any time soon.
In the short time since the crop was legalized, the price has collapsed. The multi-billion-dollar market often mentioned is going to lose zeros quickly. Marijuana industry boosters claim that they are going to differentiate products and maintain high prices for a certain segment of the market, like wines from the Napa Valley. That may be true, but vineyards take 4-5 years to establish. Pot plants grow fast, and you can grow two crops a year in many areas of California and farmers here have a knack for overproducing just about every crop they grow. One large farm could easily supply the entire market.
This raises an issue which many people, other than farmers, may not have considered.
When there’s a glut of other non-perishable farm crops and prices fall, consumers tend to buy and eat more of them. Manufacturers re-jigger recipes or design new products to take advantage of the bargains. The explosive growth of almond milk, for example, can be directly tied to the glut of almonds in the late 1990s. In the worst case scenario, the federal Department of Agriculture can step in to save the day, by buying large amounts of a certain crop for school lunches.
None of these strategies is going to help the marijuana industry deal with a supply that exceeds demand. Pot brownies on the menu at schools might make for a funny scene in a movie, but it’s obviously never going to happen. As the price of pot plummets, so will the amount of tax revenue it generates.
It’s tremendously disappointing to see our elected officials embracing marijuana farming as a solution for our state’s budget problems, much the way they did when they legalized gambling a decade ago. Meanwhile, they continue to take the rest of the agricultural industry for granted — at best — despite its enormous importance to our state’s economy and the nation’s food supply.
Thanks,
Pablito