Taming illegal cannabis farmers – Nevada County, California considers the challenge

Grand Jury issues cannabis compliance recommendations

This cannabis flower was grown outdoors in Nevada County, California. Due to its climate, the region is one of the richest cannabis cultivation areas in the state - photo: Brian Bahouth/the Ally

Nevada County, California is a noted cannabis growing region. The remote western slope of the Tahoe Sierra sees lots of rain and enough sun to make for ideal growing conditions. Since long before California voters passed the nation’s first medical marijuana law in 1996, Proposition 215, Nevada County cannabis farmers have been cultivating abundant amounts of some of the highest quality cannabis in the world.

Under the now obsolete Prop. 215, state-level regulations regarding cultivation and distribution were light, and Nevada County, along with other cannabis-fertile municipalities in the state, saw the number of grow operations expand rapidly. Many cultivators came out of the dark as Prop. 215 growers, but most remained in the shadows of legality.

A legal Nevada County cannabis farmer seasonally converted a yurt into a drying and trimming room. The farm operated under Prop. 215 and grew nearly 90 plants for 8 patients. Trimming cannabis provides perennial part-time work for many Nevada County residents. This image was taken in October of 2008 – photo: Brian Bahouth/the Ally

A large and growing number of unregulated cannabis grow operations led to problems with citizens and law enforcement officials, local, state, and federal. It is not uncommon for a cannabis farmer to be robbed at gun point during harvest season. Some growers illegally sequester water and disturb the natural landscape. Some use pesticides with no attention to directions for use. Documented environmental catastrophes in the sensitive Yuba River watershed are numerous.

In January of 2016, the Nevada County Board of Supervisors passed Ordinance No. 2405, which included provisions that banned outdoor cultivation. The Board of Supervisors also passed a resolution that would put Measure W on the June 2016 ballot, a ballot question that would, if passed, prohibit outdoor cannabis cultivation in the county. 

In the ordinance, the county listed numerous impacts to the community associated with cannabis cultivation. According to the complaint, criminality included “homicide, attempted homicide, assaults with a deadly weapon, battery, robbery, theft, illegal possession of weapons, drug possession, illegal manufacturing of dangerous substances, use of firearms in the commission of these crimes and counterfeiting.” 

Measure W failed at the polls, and in November of 2016 California voters passed Proposition 64, “Control, Regulate and Tax Adult Use of Marijuana Act,” an initiative that legalized the production, processing and sale of cannabis in California.

Prop. 64 enables individuals 21 years of age or older to grow up to 6 cannabis plants at their primary residence. Counties can not infringe on legal, personal grow operations but can regulate them for building and safety code compliance.

Under Prop. 64, licensed, commercial cannabis farmers, processors, and retailers must comply with a strict set of state and local regulations in order to operate. But since the passage of Prop. 64, the number of illegal grow sites has increased in Nevada County.

In 2019, under an emergency order “necessary for the immediate preservation of the public health, safety and welfare,” the Nevada County Board of Supervisors adopted County Ordinance No. 2467, which made outdoor cannabis cultivation in Nevada County illegal. 

The Problem

County officials estimate there are roughly 3,500 to 4,000 cannabis grow sites in Nevada County. Fewer than 100 of the sites are permitted, and fewer than 200 people have applied for permits, according to Nevada County.

To comply with county and state regulations, a commercial cannabis farmer, processor, or retail outlet needs more capital than a typical, small-scale cannabis entrepreneur can muster. 

In 2020, a Grand Jury was empaneled to investigate cannabis cultivation in the county and make recommendations that will help bring illegal farmers under the blanket of regulation and taxation. In preparing their report, the Grand Jury reviewed citizen complaints, conducted interviews with county and state officials, spoke with industry leaders, and conducted other legal research.

Under state and local laws, a licensed cannabis grow, processing, or retail facility must comply with a variety of costly requirements. Buildings must comply with the Americans with Disabilities Act. Legal businesses must have a paved parking lot and permanent bathroom facilities, among many other facility and security requirements. According to the Nevada County Grand Jury report, basic permitting costs for a cannabis business run between $85,000 and $300,000, and that does not include the costs of construction, equipment and ongoing expenses.

Further complicating entry into the legal market, due to the federal prohibition on cannabis, legal cannabis companies must do business in cash and cannot write off expenses like other companies. Getting a loan from a federally insured and regulated bank is impossible.

In the Grand Jury report, officials acknowledge the regional economic contributions of environmentally responsible boutique cannabis farmers but also recognize that they cannot raise the capital needed to operate under current state and local laws. 

The Grand Jury report concludes that in order for the county to achieve forecasts of increased revenues from cannabis permit fees and taxes, accelerated conversion of the 3,500 – 4,000 illegal growers to legal operators is needed. “That goal requires streamlined permitting, increased enforcement and penalties, and the return of primary policing efforts to the Nevada County Sheriff’s Office.” The Cannabis Policy and Compliance Division of the Community Development Agency currently regulates cannabis in the county. 

Grand Jury Recommendations:

  • The County should streamline the permitting process and reduce the costs to legalize cannabis operations.
  • The County should return primary enforcement of illegal cannabis violations to the sheriff.  
  • The County should re-evaluate fines and abatements to ensure compliance by those that can afford to pay to continue growing illegally. (For illegal growers, the current county Ordinance has a fine system that is low when compared to other counties in the state. The county’s “grace period” to abate and avoid fines potentially is another disincentive for illegal growers to legalize operations.)
  • The NCSO should explore the use of enforcement tools such as satellite technology, drones, aerial surveillance and if appropriate request needed funds to implement. 
  • The NCSO should evaluate the merits of additional Sheriff’s substations in North San Juan and other remote areas to provide a local presence for the enforcement of the cannabis Ordinance.

Brian Bahouth is the editor of the Ally and a career public media reporter. Support his work.