Sonoma County challenges for pot supremacy as others turn away

Access the full article here, by Peter Fimrite at San Francisco Chronicle, July 17 2017.

Locally sourced bat guano and other manure-based fertilizers will power Erich Pearson’s biodynamic pot farm outside the city of Sonoma, which seeks to harness the forces of the earth, the cosmos and the free market.

Craft cannabis is becoming a cousin to craft beer in Sonoma County, and the venture by the founder of the San Francisco Patient and Resource Center, or SPARC, is among several operations awaiting permits to grow and manufacture medical marijuana — and, presumably, recreational pot in the future.

Around the state, the mainstreaming and legalization of marijuana is prompting many cities, even liberal ones, to fear trouble and shun the exploding industry.

But parts of Sonoma County, and especially Santa Rosa, are making the redolent herb their own, viewing it as more akin to beer, wine and fine food as a driver of jobs, tourism and tax revenue.

“Sonoma County is very welcoming,” said Pearson, who plans to organically grow an acre of cannabis from seed using a variety of sustainable techniques, including the loving application of bat excrement to roots, preferably during the summer solstice. “This county is known for high-quality food and high-quality consumable products. I think cannabis in Sonoma County will follow that path.”
The legalization of recreational pot in California, approved by voters in November, has set off a geographical scramble for influence in the industry, which is projected to top $7 billion in sales in the state by 2020. Entrepreneurs are looking to start businesses where they can bloom — and where local politics will allow them to flourish.

The jockeying comes as hundreds of recreational-use stores are expected to open across the state starting next year and line their shelves with competing products. Consumers will pay a 15 percent excise tax for cannabis products starting Jan. 1, though the permitting and tax system remains in limbo as the state consolidates the two laws regulating medical and recreational marijuana.

Most cities and counties interested in profiting from cannabis are still focusing on regulating medical marijuana, with no rules yet for the recreational stuff. Officials say only about a third of medical dispensaries in California now pay all of the sales taxes they owe.

Sonoma County, which already has as many as 9,000 growers and 12,000 people in the business, hopes to start collecting taxes on medical weed — and add rules for recreational sales later.

“Wherever you have a mature industry, you are a little more motivated to move quickly and come into regulatory compliance both for the public good and for income,” said Terry Garrett, the interim executive director of the Sonoma Growers Alliance.

Timing is important in deciding whether Sonoma County challenges Humboldt, Trinity and Mendocino counties — the growing region known as the Emerald Triangle — as the artisanal grass capital of California.

Santa Rosa, in particular, is positioning itself as the Bay Area epicenter of quality pot. The city released a comprehensive draft ordinance June 30 that sets zoning guidelines for medical marijuana, opening up more options for businesses by lifting a two-dispensary cap that has existed within city limits since 2005.

If the ordinance is approved, Santa Rosa would become one of the few places in the state to allow the manufacture of hash oil and tinctures, a process that involves the use of flammable solvents. The city would collect 2 percent of gross receipts from growers and 1 percent of gross receipts from manufacturers, special fees assessed on top of other taxes.
Clare Hartman, Santa Rosa’s deputy director of planning, said pot cultivation could transform the many empty warehouses in the city, where the vacancy rate stands at 5 percent. Last year it was 7.6 percent and in 2014 it was 12 percent, she said, attributing the drop in part to the expanding reefer trade.

So far, 16 cannabis business permits, including six indoor cultivation permits, have been approved by the city, Hartman said. That represents 2.7 percent of the 10 million square feet of available industrial space in the city. She said 19 other applications are being considered.

“It will be craft and specialty products,” Hartman said. “We have an advantage not just because we are geographically convenient but because culturally we already have a relationship with the Bay Area. We’re not building it from scratch. We’re modifying it and making it efficient.”

Sonoma County is unusual in its passion for pot. Many cities and counties have either banned all aspects of the industry — citing reasons including that it’s illegal under federal law, could attract a bad element and might influence children to use the drug — or are dragging their feet waiting for the regulatory smoke to clear.

Just to the south, Marin County officials recently rejected 10 dispensary applications after every city and town council in Marin except Fairfax either banned dispensaries or took public positions opposing them. At least two antidispensary petitions with hundreds of signatures were submitted to the county, where 70 percent of voters supported legalizing recreational pot last year.

“The concerns we heard were, “Oh, my, kids are near there — it doesn’t work as a land use in my neighborhood,’” said Tom Lai, the principal planner and assistant director of the county’s community development agency. “Maybe it’s from people who don’t understand what a dispensary is, but we’ve had very organized opposition.”

Tim Ricard, the cannabis program manager for Sonoma County, said nobody there is interested in big-box cannabis. About 80 percent of the growers in the county have small crops of well below an acre, which is the limit under the 2016 law that set up the county’s first permitting system for the cultivation and manufacture of pot.

A subsequent plan adopted by county voters in March implemented a per-square-foot tax on growers.

The permitting system, which caps the number of medical dispensaries in the county’s unincorporated areas at nine, requires growers to conserve water, use renewable energy and eschew pesticides and chemicals. Twenty-five cultivation, manufacturing and distribution permit applications — including requests by the makers of hash oils, tinctures, salves and edibles — have been submitted since the county began accepting them July 5.

“We are focusing on allowing cultivators, distributors and manufacturers to become compliant with county and state regulations,” Ricard said. “An above-board industry provides better health and safety, and it really allows it to contribute positively to our local economic development.”

Among the products that county officials are ushering to market are non-alcoholic, THC-infused beers, lip balms and teas.

“It’s about time,” said Supervisor Linda Hopkins, an organic farmer who is on the county’s cannabis committee. “I see it as an opportunity to diversify agriculture in Sonoma County and, for some long-term farmers, it will increase their income enough to allow them to pass their farms on to future generations.”

Garrett, of the Sonoma Growers Alliance, said embracing the marijuana business is a natural step for the county.

“Why are Sonoma and Napa county so strong in the craft beer and artisanal wine industries?” Garrett asked. “It’s because we have that independent nature and creative sense that produces connoisseurs and people who want to take that extra step toward perfection.”

Peter Fimrite is a San Francisco Chronicle staff writer. Email: pfimrite@sfchronicle.com Twitter: @pfimrite