Much has been lost in the Northern California wildfires that’s been raging since early October 2017. Many have lost their homes, businesses, and crops — and we’re not just talking about grapes. Like wine purveyors, cannabis farmers have also been feeling the heat. They too have lost acres of valuable crops but unlike vineyards, they have little hope of external help. The laws surrounding the marijuana industry’s financial and insurance future remain legally convoluted.
According to The Mercury News, “Cannabis growers are not eligible for federal disaster assistance grants, which the Federal Emergency Management Agency (FEMA) gives to individuals, tribes and some community groups, according to Frank Mansell, a mitigation outreach specialist with FEMA. He confirmed, too, that cannabis operators cannot get support from the U.S. Department of Agriculture or the Small Business Administration.” So even though the cannabis industry has proven itself to consist of industrious pioneers, when it comes to disasters of this magnitude, there aren’t back-up plans, proven industry practice, and/or crisis help already in place. Legalized recreational marijuana is still very new to California and with it comes unchartered territory.
“It’s expected that up to one-third of the cannabis crop in Mendocino and Sonoma counties will be destroyed or damaged by the recent wildfires.” – CBS News. This expected loss can total in the millions which is no small feat for local growers to surmount. And without insurance and/or federal assistance, this could mean bankruptcy for many. This also means that the California cannabis industry is sure to feel the fire’s trickling effects.
What to Expect in the Immediate Future
With January 2018 looming around the corner, enthusiastic consumers are impatiently awaiting the public unveiling of dispensaries. But with this unexpected disaster coupled with the already-in-place-bureaucratic disorganization of the industry, consumers should prepare for launch delays, higher-than-expected prices, and smaller inventory offerings.
Normal supply chain disruptions can result in price increases anywhere from 10 to 20 percent. But with a disaster like this, with damages still yet to be determined, predictions — while unknown — are expected to surpass these estimates.
Even though some crops have come out unscathed, smoke and ash left by the fire could still affect product quality. Meaning even lower product yield is predicted to occur.
What to Expect for the Distant Future
Cannabis industry pioneers usually get into the business due to their passion for the plant. But with such a disastrous and all-encompassing event, many may not survive and/or return. Whether it be due to financial losses, industry risks, and new start-up costs, many may choose to leave the business — some by force. If a mass exodus of the industry does occur, consumers can expect higher prices for a longer term basis.
How You Can Help
Northern California needs your help. Donate now to your favorite organization or to any of the below cannabis related causes.