Despair in Emerald Triangle as CA legal cannabis collapses

In 2016, when California voters faced the choice of whether to legalize marijuana for recreational use, they heard promises that it would help end a racist “war on drugs,” bring a violent illegal market out of the shadows and, by the way, bring in tax revenue. Gavin Newsom, then lieutenant governor and now governor, said so. 

More than six years later, while Proposition 64 has cut arrests for marijuana-related offenses, it hasn’t lived up to its billing for the small cannabis growers in Northern California’s famed Emerald Triangle. 

CalMatters politics reporter Alexei Koseff spent several days this month in Humboldt and Trinity counties. What he heard from growers, workers, business owners, local officials and others was that plummeting prices are causing the collapse of the legal cannabis market — and the economies of surrounding communities with it. 

Commercial cannabis sales fell by 8% last year to $5.3 billion, according to just-released state tax data — the first decline since it became legal in 2018. And state tax revenue dropped from $251.3 million in the third quarter of 2022 to $221.6 million in the fourth quarter.

Cultivators who can barely make ends meet are laying off employees, slashing expenses or shutting down their farms. For many, the situation is verging on despair — seen in the faces of people whose images were captured by CalMatters assistant photo editor Martin do Nascimento. You can hear some of their voices in snippets produced by CalMatters audio editor Mary Franklin Harvin.     

One story published today starts at a food bank distribution site in Trinity County, which moved from a church to a local fairgrounds due to surging demand. Alexei also explores the criticism of state policy and its impact on the cannabis economy.  

• Adrien Keys, president of the Trinity County Agriculture Alliance, a trade association for the local legal cannabis industry: “We’re constantly at war. That’s how it feels.”

Another story focuses on the impact on workers, including some who spent years in the cannabis industry but are suddenly looking for new careers that may not be there. 

• Daniel Rivero, a 39-year-old Garberville resident for whom cannabis isn’t just a job, but a culture: “Do you keep on struggling or do you go for something that’s more secure?”

California mobile home park residents: Do you know where to file a complaint when things go wrong at your park? We want to hear from you for a CalMatters story. Send an email to  manuela@calmatters.org

National recognition: CalMatters health reporter Kristen Hwang is the winner of a first-place prize from the Association of Health Care Journalists for her story last October on congenital syphilis rates rising in California at the same time public health funding dwindled. Read more about the award.    

Other Stories You Should Know

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1 UC Berkeley vs CEQA

From CalMatters higher education reporter Mikhail Zinshteyn:

Is noise from student parties a type of pollution? 

Yes, a state appellate court ruled on Friday, delaying a much-needed UC Berkeley housing project that would provide affordable dorm rooms to nearly 1,200 students and homes for another 125 formerly homeless adults in the community. 

The court ruled that the campus and UC system submitted an inadequate Environmental Impact Report and failed to consider whether another location for the project was more suitable. 

But it’s the second, novel reason that has the university, housing advocates and some powerful state political leaders crying foul: The court also ruled that the university “failed to assess potential noise impacts from loud student parties in residential neighborhoods near the campus, a longstanding problem that the EIR improperly dismissed as speculative.”

UC lawyers argued that the ruling, which revolves around the California Environmental Quality Act, may open the door for other neighborhood groups to stall not just campus housing but any housing development. UC said it’s appealing to the California Supreme Court.

The appeals court maintained that the environmental report is a form of transparency that must explain to the public all the major issues and complications of a development. 

• The court: “Ultimately, CEQA allows an agency to approve a project, even if the project will cause significant environmental harm, if the agency discloses the harm and makes required findings.”

But several key lawmakers are vowing to push back against what they call an abuse of the landmark environmental law. Assemblymember Josh Hoover, a Republican from Folsom, had already introduced Assembly Bill 1700 to change CEQA so that noise caused by future residents isn’t an environmental factor in the eyes of the law. 

• Gov. Gavin Newsom, in a tweet Saturday: “Our CEQA process is clearly broken when a few Berkeley homeowners can block desperately needed student housing for years and even decades … The law needs to change, and I am committed to working with lawmakers this year to making more changes so our state can build the housing we desperately need.”

Does all this sound familiar? Last year, state courts blocked UC Berkeley’s plans to enroll all the students it sought until a last-minute legislative fix. 

In other California higher education news: 

Remote proctoring software gained popularity during the pandemic as a way for universities to ensure that students sitting for exams miles from campus weren’t cheating. But, in light of privacy concerns, a federal judge ruled last fall that requiring students’ rooms to be scanned by a computer camera, as some e-proctoring companies do, was unconstitutional. 

So why are professors at some Cal State campuses and UC Berkeley still using software from a company at the center of that case? CalMatters College Journalism Network reporter Itzel Luna has the explanation.

2 Sites Reservoir: What’s the holdup?

California’s recent winter storms have prompted a lot of talk about whether they will ease the drought. But water storage is a key part of that equation.

Enter the long-awaited Sites Reservoir? In less than two weeks of storms, the reservoir could have captured 120,000 acre-feet of water from the Sacramento River, enough to serve about 1.3 million Californians for a year, according to water agencies supporting the project. When complete, Sites would store 1.5 million acre-feet, compared to 50 million total for California’s existing reservoirs.

But the $4.4 billion project has been on the drawing board for more than 40 years, prompting a growing chorus of criticism from legislators and growers. So what’s the holdup? 

CalMatters’ Alastair Bland explains: Acquisition of water rights, permitting and environmental review are still in the works. Kickoff of construction, which includes two large dams, had been scheduled for 2024, but likely will be delayed another year. Completion is expected in 2030 or 2031.

• Jerry Brown (not the former governor) of the Sites Project Authority: “My personal rule of thumb is that for every year of construction you spend about three years in the planning-permitting-engineering stage.”

California’s water crisis, explained: Despite last month’s deluge, the state is gripped by a deep drought. CalMatters has a detailed look at how California might increase its water supply. And now, you can read it in Spanish.   

3 Boosting CA’s working poor

In the latest effort to help low-income working families, Assemblymember Miguel Santiago, a Democrat from Los Angeles, has introduced a bill to expand the Young Child Tax Credit to at least one million more children. Santiago and a coalition of advocacy groups plan to announce the bill at a press conference in Los Angeles today. 

Currently, the state provides a $1,083 tax credit or refund to a family with a child younger than 6. Assembly Bill 1128 would expand eligibility to families with children 6 to 17, 18- to 24-year-old students, and children of any age with permanent and total disabilities. 

The bill’s sponsors say expanding the credit would help low-income families struggling with the high costs of groceries, rent and utility bills.

• TaShon Thomas, public policy director with United Way Bay Area, a part of the coalition: “California has been leading the way and providing an example to other states and the federal government on creating ways to address and reduce childhood poverty.”

The bill could help offset the end of expanded federal child tax credits, part of President Biden’s $1.9 trillion coronavirus relief package, that slashed child poverty during the pandemic. 

Advocates estimate that the legislation would cost an additional $700 million a year. But any proposed expansion to the state’ safety net programs may be a hard sell given this year’s state budget deficit, as Alejandro Lazo and Jeanne Kuang of the CalMatters California Divide team have reported. 

In a separate effort to expand the state’s Earned Income Tax Credit, Assemblymember Mike Gipson, a Democrat from Gardena, introduced a bill that would increase the minimum credit to at least $300. That would help the 62% of recipients who don’t qualify for the Young Child Tax Credit, and about 2.5 million workers who don’t have dependents, according to United Way Bay Area. 

Another bill to watch: Assembly Bill 223, introduced by San Diego-area Democrat Christopher Ward, would allow transgender people to seal records of their name-change requests.  

Advocates for the effort note that transgender people can be susceptible to cyberbullying or even physical violence because their previous names are public record. California leaders have sought to establish the state as a refuge for transgender health care, as other states implement more restrictive measures. 

Other things worth your time

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DeSantis leads Trump in California GOP presidential primary poll // Los Angeles Times

Epic winter storm turns Southern California snow white // Los Angeles Times

Why scammers who stole jobless benefits may get away with it // Los Angeles Times 

Birth rates are declining in California. Here’s why experts think it’s happening // CapRadio

US marshals team up with California Native American tribe on missing, murdered Indigenous people // CNN

In a California town, farmworkers start from scratch after surprise flood // New York Times

California dangles bonuses for nursing homes that add staff // California Healthline

Is California overdose rate going down? Experts weigh in // San Francisco Chronicle

Hollywood studios and writers gird for a strike before negotiations – Los Angeles Times

S.F. GLIDE’s Rev. Cecil Williams to step down after 60 years // San Francisco Chronicle

Inside the self-defense class for L.A. landlords // Capital & Main

Court order leaves S.F. homeless residents, city workers in ambiguity // San Francisco Standard

Conservative group sues Kaiser Permanente over transgender care // San Francisco Chronicle

L.A. County probation chief targeted after video of violent restraint of teen // Los Angeles Times