Since the passage of California Proposition 64, the Adult Use of Marijuana Act, the cannabis industry has grown substantially. Meanwhile, its use is becoming more accepted in society, but it faces challenges. For investors, the challenge will be deciding which of the established cannabis companies can succeed long term.
Such considerations can often bear impact on the docket for the Lake County Grand Jury. The principal purpose of the Lake County Grand Jury is to serve as a watchdog over aspects of local government action. This is, according to the GJ foreperson for Grand Jury, Arleen Russo, in an introductory letter included at the beginning of the publication of the GJ’s summary report wrapping up the 2023/24 session.
Findings
At the conclusion of the GJ’s report, it issued a series of findings. First and foremost, the GJ found, owing to the tax burden and the large number of illegal farms, many of the legal cannabis companies are going out of business or leaving the state.
Following up on this discovery, The GJ also substantiated that laboratory testing is unreliable and needs to be monitored more closely. A subsequent finding is there are no legal cannabis testing laboratories in Lake County. What is more, Lake County law enforcement has insufficient resources to investigate illegal farms. Another finding concluded illegal growers undercut the legal growers, therefore causing market deflation. Finally, Lake County’s ground water must be protected from theft, primarily from illegal growers.
Recommendations
The GJ’s report then resumed, citing a number of recommendations. Primarily, they urge the Board of Supervisors increase oversight to inspect cannabis companies more closely in order to shut down illegal grows in the county. Additionally, it is recommended the BOS consider a portion of cannabis revenues be used to enforce compliance with cannabis laws. Also recommended, the BOS should take steps to prevent groundwater overuse by cannabis growers, both legal and illegal.
Once empaneled, members coalesce around critical issues and requests for investigations from members of the community are received and reviewed. After members discuss issues, directions for various investigations are formed. Issues are then, researched and investigated. The outcome is published results disbursed to the public at the conclusion of the GJ’s 2023/24 fiscal year, ending June 30.
However, recently a change in the California legislature has made the possibility of rescheduling cannabis to Schedule 3 (less serious from a Scheduled 1 federal drug classification) and could remove some of the tax burden on cannabis businesses. The Secure and Fair Enforcement (SAFE) Banking Act will allow banks to create loans to cannabis businesses. However, water usage and theft are key problems. A federal bill is pending which would decriminalize cannabis.
The Lake County Community Development Department (LCCDD) oversees local regulation of cannabis. It has one person who works to eliminate the unlicensed cannabis business and two enforcement officers who do yearly inspections, with the help of an outside agency that monitors grower plots by satellite There are three main complaints received by the LCCDD: noise, safety, and groundwater use. For ground water, areas of concern: usage, wells running dry, and theft of water.
With the growth of cannabis farms in Lake County, fears of wells running dry is a major concern. Experience suggests that proactive steps be employed for ground water use in cannabis regulations and call for research into the effects of groundwater use on streamflow, especially outside of large groundwater basins. The current annual fee for groundwater extractions, includes a base fee of $300 per well. The State of California asks for water usage reports from growers within 90 days, anyone who pumps groundwater in the region must record the amount they remove, report it to the state board, and pay fees. With the growth of cannabis cultivation in Lake County and possibility of drought and fire, maintaining our ground water needs to be a priority for the BOS. Perhaps a limit on the amount of groundwater used per day, and metering the wells of cannabis farmers, would lessen the problem.
Law enforcement also found theft of power from a utility company. Thieves in water trucks are backing up to rivers and lakes and pumping free water they sell on the black market. Thieves also steal water from homes, farms and private wells. The most common culprit of water theft: Illegal pot farms.
The types of licenses include Cultivation: the licensee plants, grows, harvests, dries, cures, grades, or trims cannabis. Manufacturing: The Licensee makes products from cannabis plants, such as edible cannabis. Businesses vary according to the activities performed and the processes used for production. Testing Laboratory: Cannabis goods are tested before they are sold by a retailer. Retail: Retailer sells cannabis products through storefronts. Distribution: A Distributor transports cannabis products between other licensed cannabis businesses, such as by taking finished cannabis products from a manufacturer to a retailer. Microbusiness: the licensee performs at least three of the licensed activities at one location: cultivation of no more than 10,000 square feet, manufacturing, distribution, or retail sales.
Studies have demonstrated the therapeutic potential of cannabinoids such as THC and CBD. Cannabis shows promise in relief, for chronic pain, and possess anti-inflammatory properties. Studies indicate that cannabinoids may alleviate symptoms associated with Parkinson’s disease, Alzheimer’s disease, and multiple sclerosis. Cannabinoids demonstrate neuroprotective and anti-inflammatory effects. Cannabinoids are being studied for their potential role in managing addiction and substance use disorders. CBD, in particular, may help reduce drug cravings and withdrawal symptoms. But further research is needed.
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