Legalizing Cannabis Has Unexpected Impact on Food and Farming in Humboldt

Like so many people in southern Humboldt County, Beth Allen has her feet in two worlds. She and her husband started Amillias, a take-out counter and brunch restaurant, 17 years ago in the town of Garberville, but she’s grown cannabis more than twice that long.

When I first reported on marijuana in this part of California almost a decade ago, the price of cannabis was higher than it is now, and I saw small businesses thriving. When I drove the commercial strip of Garberville late this past summer, I saw boarded up storefronts and closed businesses. The whole place looks like it could use a coat of paint.

Allen remembers the 1980s, when law enforcement came down hard on growers, sending helicopters into the remote hills.

“We were protesting and not moving out of the way so the helicopters could land,” she recalled. “You see all of the rivets under the belly of that helicopter.”

Forty years ago, a pound of marijuana could fetch over $5,000. On previous visits I learned that growers funded the construction of non-profit clinics and community centers, and they also had money to spend on higher-end restaurants and specialty foods unusual in a small, rural community.

Amillias catered to that crowd, with its focus on regional ingredients and the personal stories behind their food. Take their pork products: Allen and her husband have known their pig farmer for nearly two decades.

“He drives to Eureka with a trailer, gets whatever's left over from the Booth Brewing Company and his pigs are raised on marijuana and beer,” she said.

Allen has ridden the waves of change in the cannabis industry — from the legalization of medical marijuana to influxes of get-rich-quick growers. In recent years, she advocated for full legalization, and when that became a reality, she tried getting her property through the permitting process in 2017.

“I would show up at the planning department with a box of pastries, a big smile on my face, saying ‘How can we help you get us through this process?’ ” Allen said.

But she found it so frustrating and expensive, she gave up on trying to get a permit for growing legal marijuana. One legalization expert said it can cost a grower $125,000 to get licensed.

At the same time, the restaurant business started to falter. Amillias had expanded about five years ago by adding a dining room downstairs.

“I knew that we could offer something to the community and in a beautiful space,” she said. “Unfortunately I have really bad timing because our community was collapsing. The beginning of the collapse.”

At first,  Allen said, they had a thriving dinner service and private parties, but legalization triggered a drop in the price of cannabis to under $1,000 per pound, down from over $5,000 in marijuana’s heyday. Allen believes this is why fewer people started coming to the restaurant.

“I mean we would have no one," Allen said. "All of the staff, we would just stand here.”

Allen said the take-out counter's revenue dropped by 50%, while the dining room fell by 75%. They closed their dinner service and started a weekend brunch to see if that would draw customers, but they're now considering reducing that to Sundays only. The restaurant went from nine employees to four.

While a few new restaurants have opened in the region, anecdotally, waitresses from Ukiah to Eureka say they’re seeing fewer customers and getting smaller tips. And I talked with a chef on the coast who told me he closed his high-end restaurant after the economic dip. He said, growers just weren't coming in any more.

Allen said she questions her earlier support of legalization.

“I just lay in bed at night and think, ‘What was I thinking?’ ” she said. “I have strived to feed my community. I am not perfect. I am far from perfect. I just have to be very quiet, keep my head down and do the work. I pray every day for guidance of what is the right path for us, and what’s the right path for my community.”

Farming Food and Cannabis Together

According to farmers, legalization is bringing changes to food production in Humboldt County, too. For some, there are new opportunities and new customers.

At a distribution center for the cannabis company Flow Kana in the small town of Whitethorn, one employee perk is weekly produce boxes.

During a break, employees crowded around farmer Daniel Stein of Briceland Forest Farm to look at the shishito peppers, beets, broccoli, and lettuce in the week's offerings.

Flow Kana purchases the produce from Humboldt and surrounding counties, and gives it to their employees around the state. According to Flow Kana, in the last 18 months the company purchased nearly 5,000 produce boxes for its employees, paying local farmers almost $150,000.

This is a new revenue stream for Stein, albeit a small one. He’s historically sold most of his produce at farmers markets but said attendance at markets is down, and so is his income.

“We had an economy here that was largely based on the legacy market,” also known as the black market, Stein said. “Under that economy, I think money flowed more freely, people had more time.”

But as the economy shifts to growing cannabis legally with permits, much remains in limbo. Prices are changing and many growers don't know if they'll make it through the complicated and pricey permitting process to farm marijuana legally. There's talk of old timers who have stopped growing cannabis, even moved away.

“I think our economy and our culture right now is in a period of unknown,” Stein added.

The uncertainty may also be keeping people from spending, too.

To me, some of this sounds like typical growing pains in an agricultural industry: The market has changed, so expenses are up, while profits are down, and business owners like Stein have to get creative and find new opportunities, like selling produce boxes to marijuana companies.

But Stein said that legalization has also changed where people farm. Marijuana growers used to grow way up in the hills, where their crops could more easily evade detection from law enforcement. Now, if someone wants to start a new cannabis farm, they can do it out in the open, on prime, flat farmland zoned for agricultural development.

“And of course that's driven the price of prime ag land in Humboldt through the roof,” said Stein.

Another farmer at the Garberville farmers' market, Kevin Cunningham, chimed in. “There were seven acres for sale just down the road from us for $1.2 million because it has a stamped cannabis permit," he said. "That's just unattainable for somebody who ­­wants to start out growing vegetables. Absolutely unattainable.”

Some cannabis farmers aren’t planting on that prime farmland, said Cunningham.

“I have seen in our river valley good prime ag soils essentially get paved over for putting in greenhouses, which then will truck in soil to grow cannabis in," he said. "I'm not anti-cannabis but I am anti-stupidity, and I don't think that that's the proper way to develop an agricultural industry.”

Stein and his young family are a little nervous. Daniel's wife Taylor Stein said, “This transition time is certainly scary watching things board up and close down. At the same time, the community is discovering its new identity” — albeit one that’s probably going to be less flush with cash.

The Steins, however, said making money has never been their primary reason for farming.

I visit the couple and their two small kids at Briceland Forest Farm, where the Steins use organic and regenerative methods on their vibrant row crops. They’re proud that the farm takes up only one acre of their 160-acre property, which is mostly forested land with creeks running through it.

As they pulled their baby in a wagon, the Steins pointed out the late-summer crops of kale and lemon cucumbers. A little frog hopped among the cabbages.

Growing alongside the produce were towering cannabis plants. They've always grown both. They told me, an integrated farm makes good business sense, and it fits their values.

“It is a more profitable crop than veggies alone at the moment, even though that’s changing,” said Taylor Stein. "Cannabis, it’s a dance partner through the season. It is so rewarding to grow a plant that starts from a seed in February and is the size of a tree in November. It responds to your attention and care immediately.”

Before the legalization of marijuana, the Steins said they spent time on habitat restoration on their land and on experimenting with sustainable farming techniques.

Now they’re finding themselves spending a lot more time and money on getting permits to grow cannabis legally. Still, Daniel Stein says they’re holding on. He hopes that their way of farming and growing both food and cannabis will allow them to make a living and raise their family in this place.