Cannabis Co-ops

Small farmers consider strength in numbers

By Carly Wipf

Small cannabis farms have been an integral part of Humboldt County’s economy, but an evolving market and strict regulations are putting local farmers at risk of being pushed out by large companies. As more and more competitors flood the market post-legalization, cannabis cooperatives are emerging as a way for family farms to survive and compete. 

Cooperation Humboldt, a local nonprofit helping small businesses work sustainably together, is leading the charge to educate farmers about how they can use cooperative business models to their advantage. 

“Whether you consume cannabis or not, there is the need for a cooperative economic system because corporate cannabis is coming — it’s here — but not nearly as much as it’s going to be over the next several years,” said David Cobb, executive director of Cooperation Humboldt. “We’re gonna see an onslaught and what we’re trying to do is to create systems to produce, grow, manufacture and distribute cannabis in truly a cooperative way.”  

David Cobb of Cooperation Humboldt. Photo by Mark McKenna

But creating a cannabis cooperative can be confusing, expensive and chock-full of regulatory restrictions. This is why Cooperation Humboldt is partnering with local cannabis farmers who have experience forming co-ops to create a Cooperative Cannabis Economy Group, which will teach farmers about formal and informal cooperative business models and help them form a cooperative if they so choose. The first group, which is starting now, is comprised of farmers from the Salmon Creek area, dubbed Salmon Creek Legacy Farms. 

“The cannabis legacy farmer is a big part of the reason that Humboldt County is what it is because, frankly, we would be like the Appalachian region, if not for cannabis — just one more extraction zone of poor rural people exploited and oppressed by the big corporate extractors and dominators,” Cobb said. “We need to protect and defend the cannabis farmer, the local legacy cannabis farmer who has protected us.” 

So how exactly can cooperatives help and protect legacy farmers?

Cooperative work can save farmers money and increase income through sharing resources, such as equipment, insurance, transportation, packaging and branding. Unlike traditional businesses typically owned by a single individual, multiple members own, run and use products produced by members in a cooperative. 

Local co-op founder Drew Barber said keeping farms small can also help local farmers maintain their culture and produce a higher-quality, artisanal product.

“The smaller farms can pay attention to their individual plants and their individual plant needs, and end up at the end of the season with a flower that has a better taste,” Barber said.

Above all, teamwork allows small licensed farms to survive alongside big corporate operations and the still-thriving illegal market, according to Cara Cordoni, a member of Cooperation Humboldt’s core team.

Green Thumb Industries, one of the largest cannabis businesses in the United States, runs 50 dispensaries but has the licensing capacity to open 96 retail locations across 12 states. The cannabis giant ended the Sept. 3, 2021 quarter with $286 million in cash, according to its financial reports. 

Cordoni said this type of competition in today’s market is simply too much for small farmers. 

“I don’t see any other way except figuring out: How do we pull together so we can do collective marketing or cooperative marketing? Can we do cooperative sales?” Cordoni added that banding together is the only way to ensure small farmers don’t get “wiped out” when pitted against “predatory capitalism.”

“People are getting desperate and seeing, ‘I can’t do this all alone,’” she said.

In a survey with 82 respondents, Cooperation Humboldt and the Center for the Study of Cannabis and Social Policy found more than 85 percent of cannabis farmers across Humboldt, Trinity and Mendocino were interested in cooperative business as a way to reduce the burden of high production costs, low prices expected by consumers and an inaccessible market.  

Barber saw the cultural and financial benefits of small farms working together early on and founded Uplift, one of the first cannabis-friendly co-ops, after Proposition 64 legalized recreational cannabis for adults 21 and older. Uplift lowered insurance, bookkeeping and branding costs for local cannabis businesses, but that success did not come without a series of setbacks. Barber, who initially reached out to see how Cooperation Humboldt could help train new co-op members, is now one of many local experts advising the organization as it crafts the curriculum for farmers. 

Barber’s biggest hurdle in creating a co-op was deciding which type of co-op to form. After launching Uplift as a cannabis cooperative, he re-established Uplift as an agricultural co-op due to rigid land-use restrictions placed on those who form cannabis cooperatives. 

Cannabis cooperatives cannot operate on more than a combined four acres of land, making it nearly impossible for a group of small farms in Humboldt to band together and compete with a large-scale operation holding multiple licenses. 

The California Department of Food and Agriculture once championed a one-acre cap on cannabis farms but this cap was scrapped, allowing individual growers to stack licenses to grow cannabis on larger amounts of land. Not enforcing an acre limit saturated the market with more cannabis than could be sold. Meanwhile, co-ops can still only operate on a combined four acres of land. This made it all the more difficult for small farmers to get ahead. 

“Those acreage caps essentially made cannabis cooperatives irrelevant and not useful,” said Nicole Riggs, with the Center for the Study of Cannabis and Social Policy. “Unfortunately for farmers, that means that we’re looking at alternatives.” 

Riggs said those alternatives can include working with trade organizations like Origins Council, or Humboldt County Growers Alliance to lobby for changes or removal of co-op acreage caps or seeking out alternatives to forming cannabis cooperatives, like forming agricultural or marketing cooperatives that support production. The research is ongoing to see what the cannabis community needs, she said.  

Shawn Cherry of Cherry Valley Farms, a cannabis farmer who is a member of Cooperation Humboldt’s first Cooperative Cannabis Economy group, hopes it will help the participating cultivators create their own brand as a collective and decide which type of cooperative entity to form. 

“I’m really excited about having a roadmap for our group,” Cherry said. “Hopefully, we’ll be moving into some type of packaged product or viable market products to showcase to our region this year, if not next.”

Barber hopes Cooperation Humboldt’s program keeps small farmers from being confused about which entity to form like he was during Uplift’s infancy. 

“I’d love to help people not make those kinds of mistakes so that they can be more successful,” Barber said. “I want there to be more co-ops. I want my farther out neighbors to succeed as small farms and I want them to be forming cooperatives to do so.”

Sun-grown cannabis thriving at Cherry Valley Farms. Courtesy of Shawn Cherry