Marijuana is among California’s vineyards, offering promise and concern

CEO John De Friel works at Raw Garden Farm, a cannabis farm that sits among cabbage patches and wineries in Santa Barbara County, where agriculture is being reshaped by legalized marijuana. Philip Cheung, for The Washington Post

By: The Washington Post

SANTA YNEZ VALLEY, Calif. — It is the fall harvest here in this fertile stretch of oaks and hills that produces some of the country’s best wine. This season, though, workers also are plucking the sticky, fragrant flowers of a new crop.

Marijuana is emerging among the vineyards, not as a rival to the valley’s grapes but as a high-value commodity that could help reinvigorate a fading agricultural tradition along the state’s Central Coast. Brushed by ocean breeze, cannabis has taken root, offering promise and prompting the age-old question of whether there can be too much of a good thing.

Cannabis has been fully legal in California for less than a year, and no place is generating more interest in it than the stretch of coast from Monterey to here in Santa Barbara County, where farmers now hold more marijuana cultivation licenses than in any other county.

The shift in legal cultivation patterns is coming at the expense of the remote Emerald Triangle, the trio of far-northern California counties where an illegal marijuana industry has thrived for decades. The Central Coast is not growing more marijuana than the Emerald Triangle, but it could be on track to grow more legally, if trends hold.

“We’re nearly right in between Los Angeles and San Francisco, the two big consumer hubs,” said John De Friel, whose 17-acre Raw Garden Farm and seed lab sits among cabbage patches and wineries. “We really didn’t foresee how advantageous that would turn out to be.”

The regulated California cannabis market is a $4 billion-a-year industry, a boon to the local tax base and to a generation of entrepreneurial farmers more schooled in the agricultural sciences than in the dark arts of deception.

But legalization already is reordering the business and geography of cannabis cultivation, pushing crops into places they have never been. The new cultivations are challenging long-held beliefs in some conservative communities — including this one — where a rural libertarian streak is confronting a crop still stigmatized despite its legality.

The novelty of cannabis here also is a benefit. In Northern California, the marijuana industry’s decades-old outlaw culture has proved a major obstacle to transforming the black market into a legal one. With so much lower-cost, unregulated marijuana on the market there, farmers complying with the stiff, expensive new regulations are struggling to make it into the light.

Here, along the Central Coast, growers complying with the licensing process are having an easier time without a thriving black market as competition. California farmers have only until the end of the year to meet the licensing and regulatory requirements — a process that can cost hundreds of thousands of dollars — or face the law.

While expensive, the commercial logic to get legal is undeniable. In approving recreational marijuana use in November 2016, California voters vastly expanded the legal market, which previously was accessible only to the roughly 200,000 residents with medical marijuana cards. Now, marijuana can be sold to the entire drinking-age population of the nation’s most populous state.

The initiative allowed counties and cities to make their own rules, including outright bans on sale and cultivation. As a result, hundreds of potential growers are still “jurisdiction shopping,” trying to find counties with the lowest cannabis taxes, the right climate, an experienced labor force and a favorable location.

Santa Barbara County set its tax on cannabis revenue at 4 percent — the lower end of the scale — hoping to attract farmers to a place where many agriculture jobs have been lost to the economics of free trade.

The approximately 330 acres under cannabis cultivation here are a tiny fraction of the land devoted to vineyards, which once helped replace a declining beef and dairy cattle industry in the valley. But government officials and growers acknowledge that more cannabis will come, in part because the “Santa Barbara brand” built by its pinot noirs could help sell the locally grown product to new consumers.

Just how much more is a concern to some government officials, all of whom see the need for new crops to boost the tax base but worry whether marijuana in the county’s northern hills and southern greenhouses will change the local culture.

“What sets Santa Barbara County apart is our willingness to face reality — that marijuana is already in our communities and that pretending it will go away on its own is fantasyland,” said Das Williams, chairman of the county Board of Supervisors, who opposed state legalization. “But I’ll be the first to say I hope it doesn’t get too big.”

“Replacing one cut flower with another”

Along the southern tip of the county, up against the Pacific Ocean, a cut-flower industry once thrived. Acres of greenhouses nurtured carnations, daisies and orchids, supervised by the descendants of Dutch and Japanese immigrants who generations before picked this place for its climate.

The decline has been precipitous. Since the U.S. free-trade agreement with Colombia was signed six years ago, what was once a historic element of the county’s economy has been decimated.

Graham Farrar, in a pair of Vans, has stepped in.

A Santa Barbara County native, Farrar is the operating partner of Glass House Farms, which owns about 5 acres of greenhouse space just outside Carpinteria.

It is a state-of-the-art cannabis farm that produces thousands of pounds a year and has 50 employees, who unlike vineyard farm hands can work full-time because of the more frequent cannabis harvest schedule. Three annual harvests are common in cannabis greenhouse operations.

Standing in a greenhouse that once grew Gerbera Daisies and is now row after row of cannabis, Farrar notes the irony of his position.

The free-trade agreement was designed in part to help Colombia fight its problem with coca, the plant that supplies the key ingredient in cocaine. Instead, it opened up greenhouse space thousands of miles away, where he is growing what the federal government classifies as an illegal drug more dangerous than cocaine.

“Here, we’re just replacing one cut flower with another,” Farrar said.

Farrar’s operation here is more clean room than farm.

A rack of dry-cleaned lab coats awaits workers, who pick, dry and package the flower for sale. There is a small nursery for research. Each greenhouse, rigged with drip irrigation, is fitted with a $100,000 odor-control device to keep the pungent cannabis smell from nearby homes.

“Hiding is no longer a valued skill,” said Farrar, 41, who worked in the software industry and has a degree in molecular biology and biochemistry. “The net of all this — the government, the climate, the compliance culture — is that this is a very goldilocks spot.”

Farrar also has secured one of three cannabis retail licenses that the city of Santa Barbara is issuing for recreational sales. His goal is to transform the traditional marijuana dispensaries, which often have the furtive feel of an adult bookstore, into something appealing to new customers.

There will be a Santa Barbara County-grown section, but the store will have flowers and oils from all over the state. Eventually, Farrar said, it will evolve into a showroom as more and more first-time users find what they like and then choose delivery services. California-grown cannabis cannot be legally delivered outside the state.

“Most customers have not even walked in the door yet,” he said. “And Santa Barbara, as a brand, rings a lot more bells for people than other places.”

Graham Farrar, CEO of Glass House Farms, works at his operation in Carpinteria, Calif. Philip Cheung, for The Washington Post

“Complying with the law”

The initial quarterly cannabis tax revenue is due soon at the county treasury. Some early estimates say it could run between $2 million and $3 million, money that will go toward enforcing the cannabis law with some left over for public services.

In recent weeks, sheriff’s deputies have carried out raids targeting farms in the backcountry areas of Tepusquet Canyon and Cuyama Valley, the county’s two traditional if small-scale, marijuana-growing areas, seizing plants worth millions of dollars.

Large cannabis plants washed down into Montecito, just a few miles from Farrar’s greenhouses, during the catastrophic mudslides earlier this year. They served as clues that there are farms amid the avocado and citrus orchards that authorities have yet to find.

“I get that it’s a whack-a-mole approach, but we have to do something to make this fair for those complying with the law,” said Dennis Bozanich, the deputy county executive who manages the cannabis portfolio. “Our job is to make life as hard on them as possible and hope they may just go somewhere else.”

Williams, the board chairman who opposed state legalization, said the cannabis tax revenue also will help “to pay for some mental health services and save a few public libraries.”

But, given marijuana’s high profit margins, he worries that it will wipe out what remains of the cut-flower industry. He also worries about the cultural message that the proximity of cannabis production might send to the county’s young people.

“I grew up in this community, and I do not know, for any practical purposes, how marijuana could be any more accessible than it already is,” he said. “But I do see as a danger anything that legitimizes it any more.”

“County takes care of its farmers”

A few of the hoop houses at Iron Angel Ranch — steel, semicircle rings topped with plastic canopies that shield cannabis plants from the sun and wind — are high up a steep hill overlooking the Sanford Winery.

They are a legacy of the gray-market days, when farmers could grow marijuana for medical use. The risk of a raid was high. These were out-of-sight, out-of-mind “grows” that today are a small part of what the farm is producing.

Rows of hoop houses stretch out below, just along Santa Rosa Road, which connects Iron Angel to Highway 101, the main north-south artery just a few miles away. Mathew Kaplan, who helps run the farm and markets the cannabis under the name Vertical, said the 20 acres now under cultivation will grow to five times that amount by spring.

“We get lumped in with farmers in this county, and this county takes care of its farmers,” Kaplan said. “That just isn’t the case in other parts of the state.”

But Kaplan and his partners plan to make Iron Angel a destination, as well, borrowing from the model that Sanford and other neighboring wineries have used for years.

He said tourists might one day be able to stay in cabins around the 1,500-acre hillside property, which overlooks the Santa Ynez River, racehorse training stables and vineyards that stretch into the middle distance. Oaks dripping with Spanish moss cluster around the land. There are a few Black Angus cattle and a bobcat, though he calls the latter “the laziest or slowest in the world,” given all the deer around.

“I absolutely want more of us to come here; it would be great,” Kaplan said. “It’s always better to be part of a broader community.”

How many more? The high price of land here will limit the number of new cannabis operations in the valley. But the economics are appealing: One acre of marijuana yields a product worth about five times that of an acre of grape vines.

The county has considered capping how many licenses to allow. But for now, local officials are letting the market decide who comes and who survives.

“Agriculture is always changing,” said Joan Hartmann, the county supervisor who represents much of the Santa Ynez Valley. “For me, this is about keeping agriculture here and keeping it profitable.”

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