Cost of Cannabis Compliance Includes Environmental Oversight

When a new business comes to town, there are often local incentives to bring in the new industry when it promises jobs and revenue to the region. While citizens may think first of tax breaks given to said businesses, county and city councils frequently will vote to assist a new company by supplying infrastructure at taxpayer costs, including roads and extension of power lines.

But with the newly emerging cannabis industry, nothing plays out along normal lines. While creating jobs and generating revenue are perhaps the most lauded aspects of cannabis legalization in the minds of the recently converted, the citizens and politicians have seen the dollar signs, and they expect cannabis industry investors to pony up for themselves. Still, this is the cost of regulation and ultimately Californians want environmental oversight and watershed protections.

Dani Burkhart, a cannabis consultant in Humboldt County expressed her opinion on the coming changes to The Cannabist:

“‘It’s a lot of up-front costs for something you can’t amortize over time because you don’t know exactly how everything will play out over time,’ she said. ‘It’s a huge investment. But it’s also something that is worthwhile for the environment. Ideally, these measures we’re taking are protecting the environment in a more enhanced fashion than what was previously going on.’

“Burkhart said many farmers seeking to comply with the North Coast Regional Water Quality Control Board’s Cannabis Cultivation Waste Discharge Regulatory Program will have to spend thousands of dollars to begin the permitting process. The program, adopted in August 2015, requires medical marijuana growers to comply with state and federal water quality laws pertaining to drainage, road construction, fertilizer storage, water sediment and temperature control, and water diversions. The program targets illegal water diversions, road grading, pesticide use and other environmentally harmful practices of the black market cannabis industry.”

The race is on in California for cannabis producers to come online or lose out to the new market, and the hurdles that must be jumped along this race often appear out of nowhere. Competitors would do well to gain an advanced understanding the nuances of environmental oversight, particularly when it comes to water rights and permits. A well developed environmental management plan will be critical to any successful operation in the newly legal market.

Come find out more about California’s new legalization law next week, and learn how you can be involved as a successful entrepreneur at the next International Cannabis Business Conference in San Francisco on February 17th.