The billboards, bus ads and online videos popping up around the Bay Area this week look like they could be hawking beer or coffee or kale. Over a photo of a soil-covered hand caressing a tiny plant are the words: “Craft farmers. Small batch. Sustainable. The California Way.”
But the ads are extolling the California way of growing cannabis. And on this April 20 — a.k.a. 4/20, the off-the-calendar holiday/celebration of all things marijuana — the new ad campaign is a sign of an industry simultaneously excited and a bit nervous about growing up, coming out of the darkness and going legitimate.
These should be heady days for cannabis farmers and fans, perhaps the last 4/20 when marijuana is not fully legal for adults in California. In October, Gov. Jerry Brown signed into law the Medical Marijuana Regulation and Safety Act, a package of measures intended to provide more structure and clarity for the state’s loosely regulated, billion-dollar medicinal cannabis industry.
In November, at least one ballot measure legalizing adult recreational use of cannabis is expected to be before California voters. Unlike past legalization efforts, which were either underfunded or avoided by the political mainstream, one proposal is backed by billionaire tech investor Sean Parker and has the support of Lt. Gov. Gavin Newsom.
Threatened by agribusiness
Yet under the high hopes roils a bit of paranoia. Many small cannabis growers — folks who have been growing weed for generations in the Emerald Triangle of Humboldt, Mendocino and Trinity counties, where most of the nation’s weed is grown — are worried. They fear that should the state’s voters green-light recreational marijuana, major corporations would buy up massive amounts of land across the state. And that these huge grow operations would crank out the Two-Buck Chuck of cannabis — a less-expensive but inferior product that could cut deeply into their business.
Small California farmers also fear competition coming from weed-friendly celebrity stoners. Entertainer Whoopi Goldberg, rapper Snoop Dogg and heirs to the late reggae icon Bob Marley (backed in part by Silicon Valley venture capitalists) all have branded cannabis products.
Some of Flow Kana’s product from Mendocino County is packaged for sale on a shelf at the Harvest dispensary. Photo: Leah Millis, The Chronicle Photo: Leah Millis, The Chronicle Some of Flow Kana’s product from Mendocino County is packaged for sale on a shelf at the Harvest dispensary.
That’s where the $200,000, multi-platform “California Way” advertising campaign comes in. Funded by Flow Kana, a 2-year-old San Francisco company that started as a medical cannabis delivery service and is expanding into branding, the campaign seeks to elevate the reputation of the product grown by farmers in California’s weed country by branding it as something for the discerning palate.
Their point: These California farmers have been making craft beer for years while the big players would be cranking out Bud Light.
Plus, the California Way says these veteran farmers are growing bud in an environmentally sensitive way. For years, California environmental regulators and law enforcement officials have been sounding the alarm about the amount of chemicals pouring into the state’s waterways from illegal growing operations, mostly in the Emerald Triangle.
The hope is that branding weed grown sustainably in small batches will help the small farmers in Flow Kana’s network stand out. The company hopes eventually to sign up hundreds of growers. With the new medical regulations rolling out of Sacramento, a lot of small growers are going to be leaning on each other for help and support and to possibly share costs.
Co-ops key to survival
“Small co-ops are the only way that small farmers can exist,” said Michael Steinmetz, founder of Flow Kana. “We’re trying to grow and build infrastructure for them. We can give them economies of scale.”
Banding together is a template that some of the 50,000 to 65,000 cannabis growers in California have been exploring as they try to navigate the new, regulated weed world, said Sean Donahoe, an Oakland-based marijuana industry consultant.
“We’ve been seeing a lot of farms coming together,” said Donahoe, who consults for both large and small growers and other industry players in California and nationally. “They could come together under geographic appellations or other” ties that bind the growers.
“This is a smart and strategic way forward for a lot of small growers to take the next step forward,” said Kimberly Simms, a San Diego attorney whose practice has specialized in cannabis issues since 2009.
Simms said cannabis farmers are more united in Northern California than where she lives.
“You simply don’t see that in Southern California. The growers don’t see the benefit in coalescing, but that is going to have to change,” she said. “The marketplace will change. The consumer marketplace will grow more sophisticated.”
Ian Lines uses a vaporizer to smoke during the annual 4/20 celebration in Golden Gate Park’s Sharon Meadow April 20, 2016 in San Francisco, Calif. Stoners light up in SF’s Golden Gate Park for 4/20 free-for-all Francisco Kidd inspects and approves a selection of marijuana at Apothecarium on Monday April 18, 2016. How 4/20 became the pot industry’s Black Friday Kysa Butler, Bud tender, finalizes an express order with a customer at Magnolia Wellness medical cannabis dispensary April 7, 2016 in Oakland, Calif. Why medical marijuana employees need a doctor’s note to work UP IN SMOKE – Cheech Marin and Tommy Chong as “Cheech & Chong” HOUCHRON CAPTION (08/12/1978): Chong, left, and Cheech roar through a comedy scene in “Up in Smoke,” the first full-length movie feature to star the post-hippie, drug-culture favorite comedy team. Pot is moving into the American mainstream.
Billions in sales
And it will continue to boom. Last year, California’s medicinal marijuana industry generated $2.7 billion in sales — or 62 percent of the value of the national market, according to ArcView, a cannabis investor group that studies the industry. Should California voters legalize recreational marijuana in November, the overall medicinal and recreational market would grow to $6.4 billion in 2020, according to ArcView.
While the small growers have united, many major companies — possibly tobacco and pharmaceutical firms — and investors are waiting to see what California voters say in November. They are also waiting for a green light from the federal government, which considers cannabis to be illegal and classifies it a drug on par with heroin.
Banks also largely won’t handle money from cannabis businesses. Until these two things change, major investors will invest only in the infrastructure of the industry — technology, water systems, grow lighting, etc. — but nothing that, as the weed world saying goes, “touches the plant.”
“The biggest companies — the most well-known companies — are not going to make any moves in this space that is touching the plant until federal law changes,” said ArcView CEO Troy Dayton.
He thinks “the California Way” campaign “is great. It’s also about building support for policies to ensure that small growers have a place in this growing and expanding industry.”
By Joe Garofoli
This story originally appeared on SF Chronicle. See original article here.