Pubdate: Fri, 13 Sep 2019
Source: Wall Street Journal (US)
Copyright: 2019 Dow Jones & Company, Inc.
Author: Zusha Elinson


CARPINTERIA, Calif.-On a recent sunny morning in this beach town near
Santa Barbara, realtor Gary Goldberg ran into Das Williams on the
street and raised a concern: A persistent skunky aroma had required
him to knock $18,000 off the sale price of a condo.

"It smelled like marijuana," said Mr. Goldberg, adding that buyers
threatened to pull out because of the odor.

Mr. Williams, a Santa Barbara County supervisor who helped craft
regulations for large cannabis farms here, assured the realtor that he
was doing everything he could to tamp down the smell. The argument
over odor is part of an acrimonious debate over how to regulate the
region's growing marijuana industry, pitting farmers against some residents.

Cities and counties across California are grappling with where to grow
cannabis for the nation's largest legal market. More than two years
after the state stopped requiring a doctor's note to buy the drug, but
left it up to locals to decide where it should be grown, less than
half its 58 counties allow commercial farming.

Some counties like Sonoma, in the heart of wine country, have limited
pot farms' size and their proximity to residential areas. Calaveras
County, located in the Sierra Nevada foothills, quickly permitted
hundreds of grows, then reversed course and banned them. Santa Barbara
rushed in with few reservations at first and growers here captured 886
provisional cultivation licenses, more than any other county,
according to the state. Most farmers here hold multiple permits to
increase the size of their operations.

California for years supplied the majority of the black-market
marijuana sold in America, with most grown in the wooded northern part
of the state known as the Emerald Triangle. The state's legal industry
is expected to reach $3.1 billion in sales this year, according to a
report from research firms Arcview Market Research and BDS Analytics.
Illegal sales, meanwhile, are expected to hit $8.7 billion, the report

Officials in Santa Barbara, known for its coastal views, affluent
enclaves and wine industry, allowed large grows in an effort to boost
the local economy, particularly aimed at retooling wilting flower
farms in the large greenhouses clustered in Carpinteria.

"Empty greenhouses mean less taxes," said Mr. Williams, the
supervisor. "Less property taxes for schools."

Entrepreneurs can open cannabis farms of any size, in contrast to the
limits in many other counties, and at first were allowed to grow if
they signed an affidavit that they had previously grown medical cannabis.

Large cannabis grows began popping up throughout the county, with a
particular concentration in Carpinteria, where 13,000 people live next
to 28 licensed operators, according to the county.

"That smell is in the carpet. You can smell it on the towels," said
Joan Esposito, 76, who lives near some of the greenhouses.

Ms. Esposito, who co-founded a group called Concerned Carpinterians,
said the county should have started with stricter regulations,
limiting the size and placement of farms.

"It goes beyond smell," she said.

Mr. Williams acknowledged that at the beginning there were too few
rules, but said Santa Barbara has been clamping down by raiding
operations where farmers are growing more than their share, pushing
them to adopt odor-control systems, and setting caps on the total
acreage where cannabis can be grown.

So far, county tax revenue-$6 million in the first year and about $8
million in the second-has come in on the low side of the county's
projections of between $5 million and $25 million a year, he said.

Hans Brand, a former flower grower, said he switched to cannabis
because cheaper flowers coming from Latin America were making it
difficult to compete.

"We were barely staying afloat and this way we could make some money,"
said Mr. Brand.

Inside his Carpinteria greenhouses, there is a four-acre green sea of
cannabis plants. Mr. Brand said the crop is more neighbor-friendly
than flowers because he uses no pesticide and because semitrailer
trucks don't have to pick up his more compact new product.

For the business, Autumn Brands, Mr. Brand spent about $100,000 on an
evaporation system that he said neutralizes the distinctive aroma.

"I know because I live right here," he said.
- ---
MAP posted-by: Matt