North Coast legislator seeks new licensing for small medicinal marijuana growers

Medical marijuana advocates are hailing a bill that would carve a niche for small-scale growers, known as “cottage cannabis farmers,” in California’s program to regulate the $1 billion medical pot industry.

The bill proposed by Assemblyman Jim Wood, D-Healdsburg, would establish a new category of license, issued by the state Department of Food and Agriculture, for operators growing up to 2,500 square feet of plant canopy outdoors or up to 500 square feet of canopy indoors.

It’s a sequel to Wood’s bill that established 11 medical cannabis cultivation licenses based on the size of a growing operation. That bill, part of last year’s landmark Medical Marijuana Regulation and Safety Act, set the lowest level of licensing for growers with up to 5,000 square feet of canopy growth outdoors or indoors.

At meetings throughout the state held by the nearly 500-member California Growers Association, cultivators called for special consideration for small-scale growers. The cannabis trade group made that its top priority in Sacramento, said Hezekiah Allen, the association’s executive director.

“We’re doing everything in our power to make sure these growers are not completely overlooked by the legislation,” he said.

Small farmers account for as many as half of the estimated 50,000 to 60,000 growers of both medical and non-medical marijuana, Allen said. Operating from rural homesteads, suburban two-acre garages and other settings, they typically grow pot to supplement other income or offset the cost of marijuana they use for medicine, Allen said.

The North Coast is the cornerstone for California’s cannabis industry, a leader in the market for legal marijuana, pegged at $5.7 billion in sales nationwide last year, according to the ArcView Group, a cannabis investment and research firm.

Eighteen pot dispensaries in Sonoma County paid taxes on nearly $31 million in retail sales in 2014, the state Board of Equalization said.

California voters approved medical marijuana under Proposition 215 in 1996, triggering explosive growth in an industry that remained largely unregulated until approval of the law last year setting standards for commercial medical cannabis cultivation, manufacturing, distribution, transportation, sales and testing.

The law gives cities and counties jurisdiction over the location of marijuana cultivation sites, and also allows both state and local governments to tax marijuana operations. Sen. Mike McGuire, D-Healdsburg, has proposed a 15 percent statewide sales tax on medical marijuana, expected to generate more than $100 million a year and be paid on top of the existing sales tax of roughly 8 percent on goods and services.

Wood said his bill is intended to support small growers, saying in a written statement that it is “not fair” to require them to meet “the same standards as larger operations.”

Recognizing the needs of cottage growers will boost the number of them who elect to apply for licenses and “sustain many of the farmers who have been in business for years,” he said.

The licensing standards are still being formulated by the state Department of Food and Agriculture. If Wood’s bill is adopted, medical marijuana advocates expect rules for the new category of small growers will be less burdensome than the rules imposed on larger growers.

Wood’s bill was approved by the Assembly Agriculture Committee on a 7-2 vote Wednesday and is scheduled for consideration by the Business and Professions Committee next week.

You can reach Staff Writer Guy Kovner at 521-5457 or guy.kovner@pressdemocrat.com. On Twitter @guykovner