Spring 2019
The Central Coast’s newest source for all things Cannabis
EDITORIAL Tony Nunez, Editor 831.761.7353 tnunez@register-pajaronian.com
Brian Williams, Editor 805.466.2585 ext 113 bwilliams@atascaderonews.com Ryan Cronk, Editor 831.385.4880 rcronk@southcountynewspapers.com
PRODUCTION
INSIDE Propane provides power for local cannabis businesses ~ page 4 ~
420 Farm Tour ~ page 6 ~
Local cannabis control ~ page 7 ~
Cannabis Operators in SLO ~ page 8 ~
Dispensaries skirting rules ~ page 9 ~
National marijuana law? ~ page 9 ~ Chronicle is a free publication distributed quarterly and published by News Media Corporation in conjunction with the Register-Pajaronian, South County Newspapers, Paso Robles Press and Atascadero News. Questions about this product? Contact Jeanie Johnson, 831.761.7307
East of Eden Cannabis Co. ~ page 10 ~
XXXXX ~ page 10 ~
Rob Chalhoub rchalhoub@register-pajaronian.com Mike Lyon mlyon@register-pajaronian.com
ADVERTISING & MARKETING SANTA CLARA & SANTA CRUZ COUNTIES Tina Chavez, Marketing Director 831.761.7359 tchavez@register-pajaronian.com Jazmine Ancira, Marketing Associate 831.761.7326 jancira@register-pajaronian.com
MONTEREY COUNTY Sheryl Bailey, Marketing Associate 831.385.4880 sbailey@southcountynewspapers.com
SAN LUIS OBISPO, SANTA BARBARA, VENTURA COUNTIES Glo Rivera, Marketing Associate 805.237-6060, 1121 grivera@pasoroblespress.com Callie King, Marketing Associate 805.237.6060, 1127 cking@pasoroblespress.com Adriana Novack, Marketing Associate 805.466.2585 ext 1115 anovack@atascaderonews.com Cover photo by David Cardinez
Austin Meyers of Salt of the Earth Nursery chats with Carlos Paredes of Salt of the Earth Nursery in Pajaro.
-Photo by Johanna Miller of Chronicle
Alternative energy: Propane provides power for local cannabis businesses By TODD GUILD of Chronicle
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n a sunny Tuesday afternoon, Carlos Paredes drove his truck down a long unpaved road running along a series of three greenhouse businesses on the agricultural outskirts of Pajaro. The three businesses, which includes Salt of the Earth Nursery, are all involved in growing plants for the burgeoning cannabis industry. As an account manager for AmeriGas, Paredes’ job is to supply the natural gas that powers the generators, boilers, humidifiers and heaters, all of which help the plants thrive at the businesses. The businesses are among
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20 that are involved in greenhousegrown cannabis, an industry that frequently turns to natural gas as a safe, reliable low-cost alternative to electricity, Paredes said. “Some of these greenhouses don’t have PG&E, or it’s never been hooked up,” he said. “And it costs a lot of money just to tap into it.” Paredes says he also supplies natural gas to agriculture businesses such as Sun Valley Berries, Royal Oaks Farms and Driscoll’s. In addition, he provides natural gas for the Gilroy Garlic Festival, and sponsors the Watsonville Testicle Festival. Salt of the Earth horticulturist Austin Meyers said that, with limited electricity in the rural location, propane kept the plants warm in
the 25,000 square-foot greenhouse through the cold winter months. That is an important factor for Salt of the Earth, which provides young marijuana plants for large, commercially licensed cannabis farms throughout the state. The business grows about 70 strains of marijuana with names such as Gelato, Superglue, Key Lime Pie and the ever-popular Salty S’mores. Meyers has a bachelor’s degree in plant soil science from Southern Illinois University in Carbondale, where he ran the horticulture center. He said he was inspired by the myriad health benefits offered by cannabis. He tried to work in the industry when he graduated, but disliked the highly regulated
cannabis market, which was limited to people with chronic illnesses. “All the big-time growers were producing all these products, but there was no customer base because they are so strict,” he said. He moved to California, where voters had recently legalized the recreational use of marijuana, and partnered with a friend. The business’ growing process starts with tiny shoots clipped from giant, lush “mother plants.” These “babies” are then raised in a climate-controlled nursery, where the warm air is dense with misty water vapor. Once they grow for a few weeks and take root, the plants are then moved to the “teen area,” where they continue to grow, Meyers said. These are
David Davila carefully tends to young cannibas plants at Salt of the Earth Nursery. -Photo by Johanna Miller of Chronicle warmed with either heating pads underneath the pots or heaters under their tables in a room that is also climate controlled with a series of fans and louvers. All of this takes a considerable amount of energy, Meyers said. “Propane is definitely great for heating, and with what we’re doing here, it is much cheaper than electricity,” he said. “It saves a lot of money. If we went through PG&E it would be really expensive.” Finding alternative energy sources can also be a boon for jurisdictions where cannabis facilities are located. According to a 2016 report by the National Conference of State Legislators, the indoor growing systems, fans and lights, sometimes must operate 24 hours
a day, a tremendous energy draw. Colorado noted a 45 percent increase in demands for electricity, which came from indoor marijuana growers, according to the report. The City of Portland, Ore. experienced seven blackouts traced to marijuana facilities the summer after the state legalized the drug in 2014, the report said. Solar panels, while an environmentally friendly choice, can be prohibitively expensive, Meyers said. Greenhouse consultant Yariv Dorr, who works for a greenhouse next door, agreed. “We need to power somehow without PG&E because we don’t have enough power here,” Dorr said. “Propane is a good choice.”
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420 Farm Tour: A public look at a new industry
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By TODD GUILD of Chronicle
or years, local farmers and greenhouses have opened their doors and welcomed visitors for once-a-year, open house-style tours created to shine a light on Pajaro Valley’s agriculture industry. The Monterey Bay Greenhouse Growers Open House and Open Farm Tours have drawn hundreds of people curious to get a peek into an industry normally closed to the public. Now, a local organizer is doing the same for the cannabis industry. The 420 Farm Tour & Dinner was named for the date and number frequently associated with pot culture, and in fact the inaugural event will be held on 4/20. It will offer a peek at Coastal Sun, Bird Valley Organics and Lifted Farms, all based in the Pajaro Valley.
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More than that, it is an exploration of the people and the culture behind the burgeoning local craft cannabis industry, where growers are still navigating their way through the newly legalized recreational market, said organizer Penny Ellis. There is also a large focus on education, she said. “People really have a lot of questions about this and they want to know,” she said. “When you see what the growers are doing you have a better chance of understanding it.” The tour quickly sold out, with 50 people snatching up the $125 tickets. A separate “420-friendly” dinner that follows the tour also sold out at $180 per ticket. That was good news for Ellis, who says she hopes to make the event an annual event.
Ellis also hopes the tour helps usher cannabis out of the shadows, where it languished for years when the plant was illegal. “Cannabis has a really bad rap,” she said. “It is still considered a drug after years of ‘just say no.’” The focus of the tour, she said, is to highlight the multifarious uses of the plant. “There are so many benefits, both medically and spiritually,” she said. “We want to present it in a light that it needs to be presented in, which is that it is an amazing plant.” “People really have a lot of questions about this and they want to know,” she said. “When you see what the growers are doing you have a better chance of understanding it.” The tour quickly sold out, with 50 people snatching up the $125 tickets. A separate “420-friendly” dinner that follows the tour also sold out at $180 per ticket.
Lawsuit aims to keep local cannabis control
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anta Cruz County has joined several other local governmental jurisdictions in a lawsuit against the California Bureau of Cannabis Control (BCC), which seeks to invalidate a rule that allows deliveries of marijuana products anywhere in the State of California. “The BCC is fundamentally undermining the protections included in Proposition 64 by circumventing local control of cannabis operators,” said Board of Supervisors Chair Ryan Coonerty. “This suit isn’t about cannabis or even cannabis delivery – it’s about preserving our ability to protect local business and residents by making sure we have oversight over who is operating within our jurisdictions.” Filed in Fresno Superior Court, the suit alleges that BCC Regulation 5416(d) is invalid because it eliminates the ability of cities and counties to regulate commercial cannabis deliveries within their communities, a key promise in Proposition 64, which legalized commercial cannabis activities in California. Regulation 5416(d) states that “[a cannabis] delivery
employee may deliver to any jurisdiction within the State of California.” The Plaintiffs assert that the BCC ignored the specific language of Proposition 64, in Business and Professions Code sections 26090 and 26200, guaranteeing cities and counties the right to regulate or prohibit the operation of recreational and commercial cannabis deliveries within their communities. The 25 local governments initiating the lawsuit are the County of Santa Cruz and the cities of Agoura Hills, Angels Camp, Arcadia, Atwater, Beverly Hills, Ceres, Clovis, Covina, Dixon, Downey, McFarland, Newman, Oakdale, Palmdale, Patterson, Riverbank, Riverside, San Pablo, Sonora, Tehachapi, Temecula, Tracy, Turlock, and Vacaville. The suit is being litigated by Churchwell White LLP. Santa Cruz County authorizes its locally licensed retailers to make home deliveries of cannabis upon demonstrating that they meet local regulations, and prohibits non-locally licensed retailers from making home deliveries.
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Permits out for Cannabis Operators in SLO By CAMAS FRANK of Chronicle
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he City of San Luis Obispo got a slower start than its incorporated neighbors to the south on licensing marijuana businesses, but five operators are closer to setting up after selections were announced March 28. The city planner who worked the most on drafting the city’s marijuana ordinances over the last two years, Rachel Cohen, said in the week prior to the list being issued that a dozen folks had met the application’s demands before the January deadline. With the reasoning being that it is easy to start slow and harder to walk back an open door to this type of business, only three storefront dispensaries were allowed under the ordinance approved by the city council. Nine of the applications which were required to submit location and business plans, vied for the right to continue the legal process to open a retail location. The operator license is the unique requirement imposed, with use and building permits a separate matter. Approval is provisional, pending background checks and other vetting. In prefacing its announcement, the city issued a press statement noting that, “Applications were scored according to merit-based criteria including community benefit, experience, equity and labor, messaging, medical retail commitment, property control and financial investment to ensure the best operators were selected for the city.” While not explicitly referenced, security is a huge factor in the selection criteria, said the city’s economic development director, Charline Rosales, with background checks on selected applicants now under way. That’s expected to take four to six weeks. Felonies and convictions related to the
industry would be red flags. New since the city started the process to license marijuana businesses, a pair of SLO Police Department detectives are now tasked with enforcement of local and state law related to the industry. Some of the more than $20,000 in fees collected per application has already gone to the use of those municipal resources beyond planning and development time, Cohen noted. Applicants being issued the contingent operator permits for retail are: Megan’s Organic Market, a delivery business formerly operated out of Los Osos and at one point sued by the City of SLO for their operations; Natural Healing Center - SLO, an expansion of the center currently operating in Grover Beach with an emphasis on the culture and tourism aspect of cannabis; and Elemental Wellness, notable because while their credentials were approved their site was not. In a departure from Grover Beach’s approach, which established a sort of cannabisdistrict, SLO’s ordinance specifies that no two of the operations could be within 1,000 feet of each other and, Rosales said, the Natural Healing Center’s scoring was higher than Elemental Wellness, meaning they have 60 days to find another location. Notable applications which were not approved included 805 Beach Breaks, which also has a Grover Beach location. Their dispensary, which was the first to open their doors legally in SLO County, is now currently the subject of an ongoing joint fraud investigation between the San Luis Obispo and Santa Barbara county sheriff offices. Non-storefront businesses that were also part of the City of San Luis Obispo’s license approvals were Coastal Delivery SLO, LLC, and the “microbusiness” Element 7 San Luis Obispo, with a distributing and manufacturing concern.
SC Sheriff’s Office: Five cannabis dispensaries skirting rules
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anta Cruz County Sheriff’s personnel on April 3 served search warrants at five cannabis dispensaries, part of a multi-jurisdictional investigation into suspected tax evasion and money laundering. The dispensaries are also suspected of failing to provide workers’ compensation insurance to employees, as well as unlawful cannabis distribution and cultivation. According to Santa Cruz County spokesman Jason Hoppin, investigators were targeting cannabis operators who are suspected of operating out of compliance with state and local regulations. The investigation includes evidence that at least one of the businesses was using money orders in a sophisticated effort to launder large amounts of currency, and avoid payment of Santa Cruz County Cannabis Business Tax, Hoppin said. Investigators seized 540 pounds of processed cannabis and more than $140,000 in cash, along with business and banking records. All the businesses searched were controlled by the same individuals, who are suspected of directing specific financial transactions to avoid financial reporting and tax obligations, Hoppin said. Additionally, several residential properties in Santa Cruz County owned by the suspects have been
the focus of recent investigations for unregulated, unlawful commercial cannabis activity. Investigators are determining whether unregulated cannabis from those properties was introduced into the lawful, regulated market through the five businesses searched, Hoppin said. The investigation included Redwood Skyline on the 2700 block of South Rodeo Gulch in Santa Cruz, Rooted Republic on the 100 Block of Manfre Road in Watsonville, Boutique Unlimited on the 100 block of Airport Road in King City, Monterey Botanicals on the 22000 block of Fuji Lane in Salinas and Newtown Enterprises on the 7000 block of Highway 1 in Moss Landing. No arrests were made during the service of the search warrants. Investigators will be consulting with the regulating agencies and District Attorney’s Office to determine criminal charges and civil assessments, Hoppin said. The total amount of unpaid cannabis tax to the County of Santa Cruz will be determined once business records and banking records have been examined. The investigation included the Internal Revenue Service Criminal Investigation Unit, California Department of Tax and Fee Administration, California Bureau of Cannabis Control, Monterey County Sheriff’s Office, California Department of Fish and Wildlife and other agencies.
Spring 2019 •
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The Central Coast’s newest source for all things Cannabis
Next edition publishing August 2019
• Dispensaries • Growers • Medical Facilities • Delivery Services • Smoke Shops • Hydroponics • Agriculture • Business • Events • And more!
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Contact your nearest Marketing Associate today! Monterey County: Sheryl Bailey or Jon Allred, 831.385.4880 Santa Cruz County: Tina Chavez, 831.761.7359; Jazmine Ancira, 831.761.7326; Cynthia Jimenez, 831.761.7351 10
San Luis Obispo County: Adriana Novak, Callie King or Glo Rivera 805.466.2585 • Spring 2019
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