A California bill could legalize cannabis farmers’ markets, within certain limits. But there are doubts about how much it would really help small cannabis farmers in the state, who are facing severe struggles to make ends meet.
California Assemblymember Gail Pellerin (D) introduced the “Cannabis: small producer event sales license” bill (AB 1111) in February 2023, but it only began to gain momentum in recent months. It passed a full Assembly floor vote on May 30, and on August 15 passed the Senate Appropriations Committee, with some amendments. The next step is a Senate floor vote.
Under California law, cities and towns can already approve and issue temporary licenses to cannabis retail businesses to sell product at off-premises public events. But the current bill would expand on this by creating a new state license for cannabis producers to sell their products at temporary events authorized and organized by the state. These events would likely be small-scale, and separate from traditional fruit-and-vegetables farmers’ markets. Gross revenues from the events would be capped at $175,000 per seller per year.
The new options would apply only to cultivators who grow less than 10,000 square feet total, a maximum that could shrink depending on what kind of cultivation license you have. Two years after the law taking effect, the upper limit would increase to 1 acre.
Despite its limitations, the bill represents a shift in political attitudes in California, with lawmakers and regulators perhaps warming to the idea of public consumption. Earlier this summer, the California State Fair made history by permitting cannabis sales and consumption on site.
“Direct-to-consumer sales is a common and critical tool for small producers.”
California is not alone in this momentum. New York State, for example, has also taken steps toward allowing cannabis farmers’ markets. In June, state lawmakers sent a bill to Governor Kathy Hochul (D) to legalize them. The bill would allow the state to issue event permits to licensed retailers, who would work with cannabis growers or processors on events lasting no more than two weeks. Hochul has yet to sign it.
That came after New York temporarily authorized “growers showcase events” where cannabis cultivators sold products directly to consumers—a program that was suspended months after the first market opened in 2023. “By all accounts, the program was a success, bringing cultivators, processors, and retail licensees together in a way where they could directly interact with and educate consumers, build brand recognition, and orient consumers to the legal market’s offerings,” read an official memo from lawmakers.
Genine Coleman is the executive director of the Origins Council, a nonprofit cannabis advocacy group in California. Her organization was involved in lobbying for AB 1111. She explained how cannabis cultivators aren’t currently allowed to sell direct to consumers or retailers, but have to go through a licensed distributor.
“In other sectors where there are craft producers like wine, the smaller the producer the more important it is to have a diversity of access points,” she told Filter. “Direct-to-consumer sales is a common and critical tool for small producers. [AB 1111] is advancing the normalization of cannabis to make sure they have all the tools necessary for survival. It also expands access to cannabis products to consumers and patients.”
Coleman estimated that just 16 Californian municipalities currently allow public cannabis events under the existing law.
But many of the state’s small cannabis farmers are facing much bigger problems than AB1111 is likely to solve.
John Casali and partner Rose Moberly, of Huckleberry Hill Farms
John Lee Casali is a cannabis farmer in Humboldt County, where he owns Huckleberry Hill Farms, the same property he grew up on. Back in the 1990s, he went to prison on federal marijuana charges. His farm is now a state-licensed cultivator, but he has reservations about how much farmers’ markets could benefit his business.
“Any time a farmer can directly have a relationship with the consumer is going in a positive direction,” Casali told Filter. “You build trust and we do need those relationships. But most of us farmers have limited employees, so it’s really hard to get off the farm and participate in these things more than a few times a year.”
Many of California’s small cannabis farmers are at risk of going out of business, fearing a collapse in the market. In northern California’s “Emerald Triangle”—a region over 100 miles up the coast from San Francisco, including Humboldt, Mendocino and Trinity Counties—a crash in cannabis prices has threatened the local economy.
The triangle has been a hub of cannabis growing—often illegally—for decades, going back to the 1960s counterculture revolution. In 1996, California made history by becoming the first state to legalize medical marijuana. Cannabis growing in the region then exploded, to the point where it’s critical to many people’s jobs and livelihoods.
“I think when California proceeded with the legal market and didn’t limit the amount of cultivation, that really was the death of the small farmer.”
As CalMatters described in 2023, “Things are getting desperate in this remote, mountainous community in far northern California, where cannabis is king—the economy, the culture, the everything. Over the past two years, the price of weed has plummeted and people are broke.”
CalMatters reported long lines for a food bank on the Trinity County fairgrounds, and anecdotes of longtime residents leaving the region, as local stores and restaurants shut down.
“I think when California proceeded with the legal market and didn’t limit the amount of cultivation, [that] really was the death of the small farmer,” Casali said. “Currently there are 4 million pounds [of cannabis] capable of moving through the licensed retail stores, but there’s over 20 million pounds being produced here. I don’t know how they expect the smallest of cultivators to survive in the market that’s so oversaturated.”
“The state is continuing to permit farms without any ability to get rid of the product, unless it’s a fight for the lowest price,” he continued. “Cultivators in the Emerald Triangle that grow in the mountains don’t have access to cheaper labor. It costs a lot more to produce a pound here, and we can’t compete.”
Casali’s farm uses a “regenerative” approach that is fully outdoors, growing without artificial lights and fertilizing, and harvesting by hand. But he’s competing with large, vertically integrated farms, predominantly in southern California. They use indoor grows, mechanized technology and chemical fertilizers, resulting, he said, in a product costing half the price of his own.
Statewide data back up the anecdotes: The California Department of Cannabis Control reported that over the course of 2022, nearly 1,800 licensed cultivators shut down—a loss of 19 million square feet statewide, nearly a quarter of the state’s cannabis farming acreage. Reporting from SFGate cited low wholesale prices and high taxes especially hitting small farmers.
By late 2023, trends seemed to be improving for farmers: Wholesale prices stabilized, and some growers reported selling out of inventory. “It’s crazy how much quieter our mountain road has gotten over the years, but this year we’ve seen more traffic (which means more workers on farms) on the hill than we have since 2017, which I’m taking as a good sign,” Kristen Stanek-Klawitter of Humboldt Canna Co. told SF Gate.
But things are looking worse again in 2024. Reuters recently reported that small farmers are continuing to shut down in California, as increased wildfires—fueled by a heating climate—damage crops, while prices continue to fall. Over the first quarter of 2024, active cultivation licenses have decreased 20 percent compared to the year prior. Wildfires have reportedly increased electricity, water and labor costs. Statewide, California lost $700 million in cannabis revenues in 2023 compared to 2021.
“Direct-to-consumer sales through the mail would be an amazing step that would be life-changing for small farmers.”
Coleman said the state’s rush to license more growers than were initially needed is to blame for the farmers’ challenges, together with the issue of being a state-legal market under federal prohibition. And sales of hemp-derived cannabis products represent further competition, she added.
“Now we have intoxicating hemp-derived products being sold at gas stations and BevMo [a liquor chain],” Coleman said. “That’s a whole additional gray-market pressure. You’ve got jurisdictions that have unregulated hemp-derived products, but then they have a ban on licensed cannabis retail.”
Casali fears that California’s small cannabis farmers are facing an existential crisis, and that without aggressive action from the state, they will simply disappear. He has his own ideas about what would help.
“I go to a farmers’ market but then there’s no one at my farm taking care of the plants,” he said. “If I’m able to sell 10 eighths, it doesn’t do a whole lot for my farm. But direct-to-consumer [sales] through the mail would be an amazing step that would be life-changing for small farmers.”
As Casali explained it, a farm like his would then be able to grow and package its own cannabis, with customers subscribing to a mail order system—somewhat like a wine box program. This, he believes, would give small farmers a better alternative for unloading inventory, with less dependency on the current distribution and wholesaling system.
Photographs of Huckleberry Hill Farms by Ben Neff, used with permission
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