Commercial Cannabis Cultivation Could Be Boon For Oceanside Farmers
This is KPBS Midday Edition. I am Maureen Cavanaugh. For San Diego County farmer struggling to stay in business, there is a promise for potential profits from a newly legalized crop, marijuana. Allison St. John says Oceanside is seriously considering how to regulate the cultivation of cannabis.Mike Malone's family has been farming in North Oceanside for more than 40 years. He left his position as a CEO to go on his own. Now, he is researching greenhouses.We believe that the state of California has said that cannabis is a commercial crop and as a longtime farmer, we believe we should be allowed to farm that in compliance with state laws.Oceanside has over 3000 acres of agricultural land. Local farmers and residents would like to keep it that way but the question is, how do you keep the agriculture viable ?If we are not allowed to change to other crops, it will be difficult to be competitive.Many farms will be gone and turned into houses.Oceanside City Hall, Jerry Kern sits on the city medical marijuana committee which is considering how to regulate marijuanaI voted against it. I voted against it in the 1990s and record aerial should use this time. 57% of the people in Oceanside voted for.Part of that of the residence, they know public opinion is swinging their way. They own an indoor nursery that grows cuttings for patients who want to grow medical marijuana.These are cuts off of a mother plant. Members take this and they planted in their garden. They can go with the soil and whatever works best for them. Everyone has their own technique.They threatened to put the initiative on the ballot if they did not consider regulating it to make it legal locally expect being willing to have a conversation, we decided to show our initiative and pull back and do our best to work with the city instead of being confrontational and working against them.Amber says patients rely for cuttings but there is nowhere in accounting to grow it legally.Not at this time. The unincorporated areas did have licensed cultivation options available until the last election. The Board of Supervisors went in and took that back.Councilman Kern who is running for a seat next year says developing regulations locally is a better way to go.If we are going to do it, let's do it wrong.The county was wrong when they said ban it, it opens them up to a process where they lose control. If they put a vote initiative forward and passes, you are not in the driver seat.Current says dispensary poses problem but he is optimistic that they will be on board with cultivation by the end of the year.It is a legal crop in California. Why should we prohibit our farmers from growing a legal crop ?A report presented Oceanside city Council says that avocados can yield eight dollars and cannabis can yield more. They are supporting local regulations to make it legal. David Newman says farmers and growers are watching the outcome of the debate carefully.If they decide to vote no when all is said and done, we will have to put an initiative in play. We will go ahead and put it on the 2018 ballot.Oceanside could be at the forefront of regulating cultivation. Allison St. John, KPBS news.Joining me is Eric Larson. Eric, welcome to the program.I am happy to be here.State officials are expected to have relations on the commercial retail sale of marijuana and be ready to license retailers next year. Are they working on regulations regarding the cultivation of marijuana expect yes. They have a deadline to rule out the regulations. They will start licensing commercial cultivators in January 2018. We look to see what they look like and whether or not the state is ready to do the regulation. The problem is in San Diego County, there is no locale where the Lord -- local jurisdiction has said yes.Cities and counties can ban the sale and the cultivation, is that right?Yes. There was a vote by the voters in California to approve medical cannabis use and we had the vote last year for medical or recreational cannabis use, there is state legislation. In all of those levels, local jurisdictions were given the right to regulate cultivation and production and distribution. So far, no local agency has stepped up and said yes, we will welcome the farmers in our community.Why has the county Farm Bureau come in support of local cannabis production ?Voters and the voters of San Diego have said yes by the majority. They said yes to medical cannabis use and said yes to recreational cannabis use. We think that implies a yes to commercial cultivation of cannabis as well. The state of California recognizes cannabis as an agricultural crop. We think it is in keeping with the will of the voters of California and the state of California and identifying cannabis, it should be a choice and they should have the ability to diversify crops and produce a legal crop.Is San Diego a good location for farmers to grow marijuana ?We think San Diego is the best location for farmers to grow cannabis. We are the number one nursery county in the United States. We have great weather 12 months per year. We have a sophisticated infrastructure for greenhouse production were most commercial production takes place. We think we are ready to go. We think we are the place. We think we are a reasonable place. If it's not grown here, it will be grown somewhere else.That is what you envision, a mass cultivation of cannabis to be in a greenhouse? Like we grow flowers in San Diego County ?Very much so. When you look at the commercial application, we think it will be in a greenhouse for several reasons. Cannabis is extremely attractive to insects and there is no registered pesticides to use. You have to protect the crop. Security is an issue. Local jurisdictions, if they eventually okayed the production, they will want strong security measures. You will not do that in an open field. If you can control the environment with temperature and light inside a greenhouse, you will be the best producer in the marketplace and do better than everybody else. We think the indoor greenhouse operations are where the field is going to go.Farmers in San Diego County have come up against the price of water. How much water is it going to take to grow cannabis as a commercial commodity ?Very little because there are people who say cannabis uses too much water but they are talking about when it is growing in the ground. Any crop growing in the ground uses a lot of water. Commercial cannabis production will be done in pots and hydroponically. They will use the water and capturing it and recycling it. We think it will have a very small water footprint.You mentioned security. We heard in the feature the staggering amount of money people are predicting that farmers could get for a marijuana crop, $4 million per acre is one thing that was said in the feature. How do you think that money will change agriculture in San Diego ?I laugh when I hear those numbers. Farmers say they have a great capacity to overproduce any crop. It doesn't matter what it is. Barriers will be big. There's not a lot of people who can get into it. There are not going to be hundreds of growers. The infrastructure cost will be high. You cannot predict the profit margin because the local authority, they have the capacity to tax and they will want a big chunk of the margin of that production. Those numbers may be based on what is going on in a small market right now. We think you will not see those kind of profit margins. They will be much smaller. I think all in all what it will do in the long-term, it will give farmers the capacity to grow something else to diversify their portfolio.You brought up security. If indeed it is near $4 million per acre or $1 million per acre, crop that, that might start to happen in San Diego County.That is possible. I would expect of local jurisdictions like the county or the city's try to decide cultivation, I expect them to require 24-hour security at these operations. They expect them to install cameras and motion sensors and requires 24-hour security guards on site. Security is a big issue. The farmer will want to have a secure operation as well. The last thing they need is someone coming into the greenhouse and tearing in there and stealing what could be a valuable crop.We have talked on several occasions in recent years about the hard times the San Diego counties are going through because of water and the drought and how trees that used to be planted have been abandoned. I am wondering what you see. Do you see this sort of thing cultivating cannabis as bringing new life to agriculture in San Diego?I do. As I said before, give farmers a chance to diversify the portfolio. If they are a flower or avocado grow, I do not see them abandoning that operation. I see them putting in a small operation that would work along with the other agriculture that they have. I have had conversations with avocado growers who say if I could have 10,000 square feet or 20,000 square feet, a small area of cannabis production, that will give me that capacity to remain in farming. The low margins are not critical.I have been speaking with Eric Larson. Eric, thank you.Thank you.
New marijuana laws will soon go into effect, and the city of Oceanside is among those considering how to regulate the cultivation of cannabis.
For some San Diego County farmers struggling to stay in business with rising water bills and higher labor costs, there are potential profits from the newly legalized crop.
Mike Mellano’s family has been farming in Morro Hills in north Oceanside for more than 40 years. Mike stands next to his mother, Sharon, beside fields of myrtle bushes, grown for florists’ arrangements. Her bright green T-shirt has the slogan “Keep Calm and Farm On” in big letters on the front.
Like most farmers in San Diego County, the Mellanos are dealing with rising water and labor costs. Mike Mellano recently decided to quit his job as CEO of the family business and strike out on his own, a move his mother approves. He is now exploring the future of commercial cannabis cultivation.
“We believe the state of California has said that cannabis is a commercial crop,” Mellano said, “and as farmers, we believe we should be allowed to farm this in compliance with state laws.”
The city of Oceanside still has over 3,000 acres of agricultural land, more than most other incorporated cities in San Diego County. Local farmers and residents would like to keep Morro Hills as farmland — the question is how to keep agriculture economically viable.
“I think the community would like this to stay in agriculture, and we certainly would like it to stay in agriculture, but we have to be profitable, so we can’t be farmers and lose money,” Mellano said. “If we’re not allowed to change into other crops, it will be difficult for us to be competitive over the next several years. Many of these farms will be gone, and turned into houses.“
Housing developments already nudge up to the western edge of Morro Hills. The city of Oceanside invested $50,000 earlier this year in an initiative to promote agritourism in Morro Hills, as an attempt to introduce more revenue-producing businesses.
Oceanside's medical marijuana ad hoc committee
So far, marijuana cultivation is not one of the options the city is considering. But Prop 64 passed last November, legalizing recreational marijuana in California, and in April, city councilman Jerry Kern — a Republican — proposed forming a medical marijuana ad hoc committee. It is now considering whether and how to regulate marijuana cultivation, testing, distribution and sales in Oceanside.
“I voted against medical marijuana back in the ’90s,” Kern said. “I voted against recreational use this time. But 57 percent of the people in the city of Oceanside voted for it. So the idea is, if we’re going to do this, let’s do it right.”
Public opinion shifting
Oceanside residents David and Amber Newman know public opinion is swinging their way. They own a state-licensed indoor nursery that grows cuttings for marijuana patients who want to grow their own medicinal marijuana.
“This right here is what most of our patients start with,” Amber Newman said, showing a tray of small cuttings rooting in soil. “These are cut off of a mother plant. So our members will take this and they’ll plant it in their garden: they can do hydro, they can do soil, whatever works best for them, everybody has their own technique.”
Earlier this year, the Newmans threatened to put a citizens initiative on the ballot if the Oceanside city council did not consider regulating marijuana to make it legal locally.
“With the city deciding to have the conversation, we decided to shelve our initiative,” Newman said. “Pull it back and basically do our best to work with the city, instead of being confrontational and working against them. “
The Newmans have been in the business of growing cuttings for medical marijuana patients for nine years. They said several hundred patients rely on them, but right now, there is nowhere in the county to legally grow it commercially.
“Not at this time,” Newman said. “The unincorporated areas of San Diego County did have licensed cultivation options available until the last election, and the new board of supervisors went in and basically took all that back.”
The change of heart at the county came when Kristin Gaspar ousted Dave Roberts last November. Gaspar was among the 3-2 majority voting to ban marijuana operations in unincorporated areas of the county.
Kern is running for a seat on the county board of supervisors next year to replace Bill Horn, who is termed out. Kern said developing local regulation is a better way to go than a ban.
“I think the county was wrong when they said, ‘Let’s just ban it,’” Kern said, “because it opens them up to the initiative process — then they lose all control. If somebody puts a voters’ initiative forward and it passes, then you’re not in the driver’s seat anymore.“
Kern said the main problems surrounding marijuana regulation lie in regulating dispensaries, but he’s optimistic his city council will be on board with marijuana cultivation by the end of the year.
“My feeling is, it is a legal crop in California,” Kern said. “Why should we prohibit our farmers in the city of Oceanside from growing a legal crop?”
A report issued for the ad hoc committee in April suggests the cash value of an acre of cannabis is $4.2 million, compared to $68,500 for an acre of strawberries and $8,300 for an acre of avocados. The report predicts cannabis will generate $7.6 billion in sales in California by 2020.
Farm Bureau on board
Back in Morro Hills, Joel Wiesberger is working to develop outdoor cultivation of marijuana in greenhouses.
Wesiberger said his first experience of marijuana was when his grandmother had to undergo chemo for cancer in the mid-1980s.
“I remember they called ’em grandma's special cigarettes,” he recalled. “I saw that it really helped her, and it imparted something to me that marijuana is a special plant, and it has something to offer.”
Weisberger had an indoor nursery in Vista for over a year before it was busted by the Sheriff’s Department. But charges were dropped because he had all the correct state paperwork. Weisberg still has the evidence tags he used to go and pick up his confiscated equipment from the sheriff’s office.
Now, he is working with the San Diego Farm Bureau, which this year has taken an official position in support of legalizing cannabis cultivation locally.
Weisberger said marijuana does not have to be grown in indoor warehouses. Outdoor greenhouses would need to be made secure, but they would save energy.
“Growers don’t want to spend $30,000 a month on electricity,” he said. “They do it because they have to, because it’s secure and hidden. But if you could grow the same quality product and use the power of the sun, it not only brings overhead down, but is also definitely more environmental.”
Citizens’ initiative still a possibility
David and Amanda Newman are watching the outcome of the city’s medical marijuana ad hoc committee carefully. It is due to make recommendations to the full council in September.
“We want the city to say, ‘OK, here’s where you can do this, here’s your zoning area, here’s your path to your conditional use permit, here’s your path to a business license.’
“If the council decides to vote ‘no’ when all is said and done,” David Newman said, “we will have to put our initiative into play, which will mean gathering signatures and putting it on the 2018 ballot.”
One way or another, Oceanside could be at the forefront of regulating and legalizing local marijuana cultivation, not just in industrial warehouses, but also on agricultural land.