Northern California — Marijuana farmers and dispensary owners across Northern California are nervously watching as wildfires burn through some of the state’s prime cannabis growing areas and destroy valuable crops, which could drive up prices for consumers across the country.
“This is right smack in the middle of people’s harvests,” said Eli Melrod, the CEO of Solful Dispensary in Sebastopol, in northern California. “It couldn’t have been worse timing, frankly.”
A single marijuana plant can be worth up to $5,000, but pot growers can’t get crop insurance like traditional farmers or the vintners whose grapevines tend to get most of the attention here.
Wildfires are burning across parts of Napa, Sonoma and Mendocino counties, which are known for both wine and marijuana, particularly among high-end consumers willing to pay a premium for the name.
Complicating matters: Marijuana farms are built in remote areas with poor road access and don’t necessarily appear on firefighters’ maps of buildings to be protected. The growers often live largely off the radar, without health insurance or access to traditional job support systems such as unemployment insurance. Black market growers may be reluctant to tell friends and family members of the losses they’ve suffered.
“It’s just sad that we live in this underground world where we can’t discuss the true extent of the damage,” said Jessica Lilga of Alta Supply, a statewide wholesale cannabis distribution based in Oakland. “All remaining growers who did not literally lose their crops will be affected.”
It’s unclear exactly how many people work in the cannabis industry in northern California and how many cultivation operations exist. Lilga said she’s aware of “thousands” of grow operations but was reluctant to speculate, given the industry’s secretive nature.
But any interruption could have widespread implications for American marijuana consumers, legal or otherwise.
Millions of Californians consume medical marijuana, but even more pot is illegally shipped across state lines for black markets around the U.S. California’s legal cannabis market is worth an estimated $2.76 billion, according to marijuana analytics firm New Frontier Data, while the state’s black market is worth $13.5 billion, according to GreenWave Advisors.
GreenWave estimates that nearly $11 billion worth of the state’s black-market cannabis is grown in Northern California, with a “significant” amount of that shipped to neighboring states. In comparison, the California wine industry is worth an estimated $114 billion nationally, although the two industries are hard to compare side-by-side because one is illegal.
Lilga, who lives in Santa Rosa, was evacuated herself when the wildfire ran over her neighborhood. She’s not sure she has a home to return to: “That cash that all these growers should be bringing in next month would help rebuild our burning cities if it were not all taken away.”
Lilga predicted that an otherwise good crop year means the state’s overall supply should be enough to meet demand without significantly impacting price. Still, many cannabis dispensaries and distributors are setting up GoFundMe accounts to help growers who have lost their crops.
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