Deadly Wildfires Devastate California’s Marijuana Industry

Wildfire in California Marijuana Industry

Northern California is alive with lethal wildfires, and the Emerald Triangle, which houses many of the state’s cannabis farms, is burning. The blaze is wreaking havoc in Mendocino County, destroying numerous farms just as California is gearing up to start selling recreational marijuana legally next year. There is no respite for pot business owners in the area, many of whom lost their crops.

Secretary of the Mendocino Cannabis Industry Association, Nikki Lastreto, had this to say of the widespread devastation, “Nobody right now has insurance. They might have insurance on their house, but not on their crop.” Marijuana growers cannot insure their businesses, as federal law still prohibits pot. Because of this, it is illegal for financial institutions to provide any services to cannabusinesses.

Derek Peterson, Chief Executive Officer at Terra Tech, a company that cultivates and sells cannabis in California, explained the crisis that pot farmers now find themselves facing. In this particular area, farmers invest over $5 million into their production facilities, and they spend upwards of $3 million just on growing the crops alone.

“If their facilities burn down, a lot of these people will not be able to get any economic relief for them from an insurance claim,” Peterson explained. “There is no mechanism for recovery to repay them for their loss. It is a tremendous risk for these people.” Spokesperson for the California Cannabis Industry Association, Josh Drayton, says that it is still too early to know how many of the roughly 15,000 pot farms burnt down in the California fire.

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Drayton predicts, “The devastation is going to be larger than anybody would hope it to be,” and Lastreto, who also co-founded the grow operation Swami Select, says that she knows of several farmers who have already lost their farms. Those who have not lost everything are harvesting now to protect their crops from burning down and to prevent smoke contamination.

“A lot of plants have been lost in the fire, especially in Sonoma County,” Lastreto said. “In southern Mendocino County, there are farms still burning right now.” At the time of writing, there were 22 wildfires busy raging through California. Twenty-three people lost their lives, hundreds are missing, and thousands of business and homes along a 170,000-acre stretch are gone.

Over recent years, seasonal wildfires have been steadily worsening in California. Marijuana farms have gone up in smoke a few times before. Stan Florea, a fire information officer for the U.S. Forest Service, which deployed 1,500 firefighters to California, said, “It is very typical that in fires in Northern California, there could be marijuana farms burned up.”

Despite pot farms being illegal on federal lands, which Florea noted, Governor Jerry Brown declared eight counties in a state of emergency, including the famous wine counties of Mendocino, Sonoma, and Napa. They overlap with some of the pot-producing Emerald Triangle, which includes parts of Humboldt, Trinity, and Mendocino counties, most of which the fire passed by.

However, according to Peterson, the wildfires are unlikely to have any great impact on the state’s overall supply of recreational cannabis when shops open next year, simply because so many other farms are scattered and operating throughout the state. California legalized medical marijuana back in 1996 already. Voters approved recreational cannabis by referendum just last year.

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Outlets for recreational pot sales will open their doors in January 2018, and state lawmakers are busily working on how to regulate and tax it. According to New Frontier Data, medical marijuana sales alone totaled $2.8 billion in 2016, and by 2020, recreational sales will likely triple that figure to well over $6.5 billion.

“Here comes the fire at the worst possible time for them,” Peterson said. “I have a lot of friends who are really troubled right now.”

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Comments (1)

  1. Avatar for Zlatan Zlatan October 16, 2017 / 11:16 am / Reply

    It has great impact on the state’s overall supply of recreational cannabis.

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