A Cork marijuana farmer in California tells Kevin O’Neill that legalising it has been good for the economy, with no cartels and no deaths, and it’s only a matter of time before it happens in Ireland
A year ago, California joined the growing list of US states to legalise recreational cannabis.
Prior to passing the law, public officials had sold it as a huge opportunity to generate enormous revenue. By the end of 2021, the global cannabis market is estimated to cross the $30bn (€26.5bn) mark, according to data published by Forbes. In fact, at the end of 2017, the market had already hit almost $8bn, with the US holding about 90% of the sales.
It is no surprise, then, that Californian legislators were happy to follow the example of Colorado, Nevada, Alaska and others.
It is the same spin that Andrew Cuomo, the governor of New York, is using to push ahead with a policy to legalise recreational marijuana use by the end of this year. Mr Cuomo outlined his support for legalisation in his “state of the state” address in December. Typically, such speeches map out plans for the year ahead and this was no different. He said that legalisation could generate more than $1.7bn in taxes annually for New York and would put them in line with several neighbouring states.
Ten other states and Washington DC are on board, with the new tax revenue being used to boost schools and transportation initiatives.
A study commissioned by Mr Cuomo’s office concluded that the benefits of taxing and regulating the drug outweighed any negative effects. Legalisation could bring in between $248m and $677m in new tax revenue in its first year, the report said. In addition, it could also ease the opioid crisis and mitigate racial disparities in the criminal justice system.
However, it has not all been smooth sailing for the states that have decided to go down the route of legalisation. While Colorado has seen a straightforward trend of reduced crime and increased tax revenue — in 2017, $247.7m in tax revenue was generated — that trend has not necessarily been the case everywhere.
In California, cannabis farmers have been particularly vocal about tight regulation that has flooded the industry. Many have been put out of business and there are fears about the arrival of marketing men and big business into the sector and what that could mean for local growers.
Local news sources in northern California, including the Press Democrat in Sonoma County, have run articles in the last 12 months noting “steep upfront payouts” for permits and the impact that this has had on the value of the local cannabis harvest.
Some local growers have reported a near two-year wait for permits to cultivate, a delay which has prompted some to up and move to nearby Santa Barbara or other counties.
The Press Democrat cited a report by the Sonoma County Economic Development that estimated the total value of the yield at approximately $230m. That is down from previous estimates of more than $1bn.
The New York Times described California’s experiment in legalisation as “mired by debates over regulation” and “hamstrung by cities and towns that do not want cannabis businesses on their streets”.
The size of the market led to predictions of soaring cannabis sales but, conversely, sales actually fell in 2018, according to GreenEdge, a sales tracking company. Around $2.5bn of legal cannabis was sold in California in 2018, roughly half a billion dollars less than in 2017, when only medical marijuana was legal.
The issue, according to industry experts, is that the state simply produces far more marijuana than it can consume. With the cost of legal marijuana tied up in red tape — sales tax, cannabis excises, and other costs that have resulted from regulation — it is simply much cheaper for people to buy from the black market, retaining the status quo.
A report published by the California Department of Food and Agriculture showed that the state produced up to 15.5m lb (7m kg) of cannabis. Just 2.5m lb (1.13m kg) were consumed.
The surplus equates to 13 times the total annual production of Colorado. Where does it end up? Smuggled eastwards across the Rockies and the Mississippi, where it is sold on the black market in states where legalisation has yet to happen.
The California Bureau of Cannabis Control has admitted that the issues could take time to iron out, but they are encouraged by the early trends. The office received a surge of late applications for licences in late 2018 and has issued 2,500 temporary licences.
At the heart of California’s marijuana industry is a Corkman. Martin O’Brien, originally from Ballinlough, though based on the west coast of the US since the 1990s, is the owner of Foxworthy Farm, an 82-acre site in Sonoma County. Just north of San Francisco, it sits on the edge of the Napa Valley wine-producing region.
The area has a population of just over 500,000 and is known in the US for its agricultural output. In recent years, that output has struggled with poor, unpredictable weather and rampaging wildfires. Mr O’Brien’s operation at Foxworthy Farm had to evacuate twice last year due to fires.
The cannabis crop is no different, with a cloudy summer and heavy early rain damaging the cultivation operation throughout northern California. Mould is a major issue.
Speaking from a snow-covered Foxworthy Farm, Mr O’Brien said that the last 12 months have been “pretty insane” since legalisation came into play and the money men entered the market.
“So much has changed in California,” he said. “We have shipping manifestos now: Receiver information, product details, all the logistical and tax information. The compliance is through the roof; we have binders that run to three-and-a-half feet in length across the floor with compliance information. Everything from the placement of waterways to the distance to neighbouring properties, to the amount of water used during growth.
“And I welcome that. We are lucky. Berkley County was implementing a lot of this stuff a year before the law was passed anyway in anticipation, but tons of other people went out of business because they couldn’t handle it.”
Hundreds of smaller operations closed as a result of the regulation, though.
By September, Sonoma County officials had shut down more than 600 unpermitted cannabis operations since the start of 2017. They had levied more than $400,000 in fines to those operating without permits and officials added that they are willing to respond quickly to cannabis-related complaints.
Some 682 complaints had been received relating to cannabis cultivation on private property in the previous 18 months, with the vast majority of these — 638 — forced to stop growing. Just 24 were allowed to continue operating.
Mr O’Brien said there are fewer than 700 legal cultivation sites in operation in the area, but he estimates that roughly the same number are operating without permits at present.
He said that the bureaucracy that has emerged has changed the nature of the industry significantly.
“Just 20% of counties in California actually let people cultivate, despite the passing of the law and, in the counties that do permit it, there is a significant amount of taxes to consider: There is a 10% premium for cannabis, for a start. That is 10% on top of sales tax, state tax, employee benefit tax and everything else, too,” said Mr O’Brien.
“There is a new sheriff in town: It is the planning and zoning department, not the cops. It is a completely new world from the one that we started out in.”
Does he yearn for the old days?
“It is a good thing; it can only be a good thing,” he said.
There is a 15% excise tax at the state level. Previously, huge resources were being devoted to tracking and cracking down on illegal operations, with no taxes floating to the top. Now, that money is being made available for those that need it.
Mr O’Brien also runs the longest running dispensary in the world: The Patients Care Collective in Berkely. He opened the doors on April 4, 2001, and, remarkably, was never raided.
At the time, it was one of more than a dozen dispensaries in the San Francisco, Oakland and Berkely area. Every single one of the others has since closed its doors.
What made the Patients Care Collective different?
“We were patient-focused,” he said.
“But, also, we never got into cultivation. The feds took a different attitude towards you if you were in cultivation. The DEA was targeting those people who put their heads above the parapet.
“But, for some reason, the district attorney didn’t see us in that way,” Mr O’Brien said.
“Our little dispensary was never targeted. It was patient-focused: we were giving relief to people who needed it.”
It is this patient focus that still drives Mr O’Brien and the Foxworthy operation.
Expansion is on the cards. The potential benefits are huge, economically, but also for patients in need of medical marijuana, he said.
Last year, access to medicinal cannabis made national headlines in Ireland when Cork mother Vera Twomey set out to walk from her home in Aghabullogue near Mallow to the Dáil to raise awareness of the issues surrounding access to medicinal cannabis.
She was looking for access for her daughter Ava, who suffers from Dravet’s syndrome, a rare form of epilepsy.
Last August, Vera reported that her daughter is now “pharma-free” and is being treated solely by forms of medical marijuana.
It was just one of several such cases in Ireland.
Speaking late last year, Health Minister Simon Harris said that he supports the growth of marijuana for medicinal uses in Ireland.
However, despite describing it as a “major priority” for 2019, Mr Harris has insisted it would likely take some time to introduce measures to do so.
Speaking on RTÉ’s Ear to the Ground, he said: “This is not about the recreational use and people smoking joints. This is about using in a controlled way, in a monitored way, with the support of your clinician, a product that could ease your pain and suffering after you’ve tried all the conventional treatments.
“Does it make sense to grow your own in Ireland rather than be dependent on importing a product? I think quite frankly it does.”
However, he said the Government would be looking to import the product in the short term, adding: “You can’t obviously do that overnight. There is quite a lead-in time and there are patients who need this product as soon as possible.
“What we’re likely to do in the first course of action is to try and secure a product.
“Then, in the medium term, talking about growing our own and securing our own supply in Ireland is the sensible thing to do.”
Mr O’Brien said it is surely just a matter of time before Ireland and other countries follow suit.
“Prohibition does not work,”said Mr O’Brien.
“The evidence is there. Look at California, Colorado and Nevada. The income at state level goes up, the crime rate goes down.”
It is only a matter of time before it changes, though, said Mr O’Brien.
“In the next few years, the US is probably going to bring this to state level and legalise it everywhere. When that happens, Ireland and other countries will look at it and get their stuff together then.”
Mr O’Brien believes it could be the next chapter in a sea of social change in Ireland.
“We need more marches, more protests and more pressure,” he said.
“It is just a matter of time before this changes.”