Will Rio Dell’s Cannabis-Friendly Business Park Pay Off Economically for That Community?

While the majority of California’s municipalities are not allowing commercial cannabis activity (see Marijuana Business Times coverage from Feb. 18), the City of Rio Dell is letting cannabis businesses go big in the industrial area along Highway 101 across the river from downtown.

Rio Dell even created a cannabis-themed logo for its Humboldt Rio Dell Business Park, as this stretch is now called. Although the zoning is in this area is not exclusive to cannabis, Rio Dell City Manager Kyle Knopp says via email, “At the moment, the cannabis industry is the primary investor in the park.”

There are some large projects going in, multi-faceted developments that include both volatile and non-volatile manufacturing, processing and packaging, greenhouse and indoor cultivation, nurseries, distribution facilities and a cannabis testing laboratory. Readers can check out the city’s July, 2018, informational sheet on approved developments here (link to pdf).

Once realized, this business park will be a major industry hub in Humboldt County, and Knopp says there are even more projects currently in early stages of development.

Rio Dell is taking a forge ahead and lead approach to the cannabis industry, as opposed to the wait-and-see approach of neighboring Fortuna. For more on local dynamics, this Times-Standard story from January contrasts Rio Dell with nearby Ferndale and Fortuna.

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Toward the end of February, I was able to visit both the Humboldt Brand facility at the northern end of the business park and Developer Glenn White’s complex just south. The proprietors told me a bit about their business models and development plans, and about their experiences working with the City of Rio Dell.

The Humboldt Brand facility

The Humboldt Brand facility is located at the former Moore Fuel parcel, and will soon house volatile manufacturing, processing and a nursery. The distribution arm of the business is up and running now at this location.

Bonnie and Reuven Sherr

Humboldt Brand CEO Reuven Sherr and COO Bonnie Sherr say it’s been “fantastic” to work with the City of Rio Dell on this project. They are impressed with city staff’s professionalism, with the timeliness of their work and with their availability for answering questions.

“Everybody that we’ve had to deal with has been really supportive,” Bonnie Sherr adds. The Sherrs considered other options for their Humboldt Brand headquarters, but this particular location came with a level of certainty not available at other sites. “We knew we would be able to get the permits here — Rio Dell approved this area for cannabis.”

Humboldt Brand has been operating as a consulting business out of an office in Garberville, assisting their co-op of farmers with all facets of permitting, including agricultural consulting. They will continue to provide consulting services at the new facility, in addition to their licensed operations.

“What we saw is that no one is going to make it in this industry by themselves,” says Bonnie Sherr. “Our goal is to work with everyone in here to try and be powerhouse of Northern California,” Reuven Sherr adds. “We have to band together.”

The industry has changed dramatically, Reuven Sherr continues. Between lab testing requirements, having to set up payroll for employees, licensing fees and the application process – the new legal era can be a lot for any one farmer to handle.

Humboldt Brand helps farmers determine exactly what they need to do to have efficient business operations and to make sure all of their proverbial ducks are in a row. Planning ahead is essential, Bonnie Sherr says, like never before.

For example, before planting, they consult with farmers on workflow objectives and prudent strain selections by asking questions like, “Is it just going to be an oil field and you don’t need that many employees?” “Or, do you really want it jarred up?”

With their new facility, they hope to ensure prosperity for their cooperative of farmers in the new legal market by not only providing clones, processing, manufacturing, packaging and distribution for clients, but also through continuing to offer support for brand and business development.

Humboldt Brand also has plans to give back to the community: 1% of profits are earmarked for Southern Humboldt youth sports programs. They will also do profit sharing for employees and for farmers involved in getting the business off the ground.

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Just south of the Humboldt Brand facility, Developer Glenn White’s five-acre parcel will house three new buildings. The first is nearing completion and will have a testing laboratory, a manufacturing facility and a distribution business. Another of the three buildings will house cannabis-complementary businesses including a health spa, a retail clothing shop and a coffee bistro.

Facade of first building of Glenn White’s development

White purchased this parcel back in 2015, foreseeing the state’s nearing legalization of recreational cannabis and the potential for industry in this location. Once California did legalize at the end of 2016, he started to advocate for the allowance of cannabis industry in the business park.

He says that in the very beginning, Rio Dell leadership really had to give it some thought – the decision to allow cannabis industry in this sector was not instantaneous. White says he made good faith efforts to educate the city council on the potential benefits of allowing regulated cannabis businesses in town. He also underscored the value of a legal regulated market to consumers.

“Eventually they turned the corner and said we want to zone this area for cannabis development,” and White was ready to go. All along, his vision for this parcel was a complex of some sort, incorporating retail and industry services. Check out March, 2017, Times-Standard coverage of Rio Dell’s developing vision for the business park.

Developer Glenn White

White has been involved with the industry “for a long time.” He bought a ranch here in the 80s, and was growing back in the day. Over the years, he’s had a lot of first hand experience assessing the quality of cannabis from all over the state. He asserts that the best comes from the Emerald Triangle, even now in the new regulated market.

The biggest hurdle in the here-and-now, White says, is to educate the consumers in SoCal as to the difference in product, to reach consumers that buy cannabis without giving a thought to the source.

To create demand for Emerald Triangle sun-grown products, consumers must choose to support small-scale organic farmers, as opposed to industrial mega-grows. When there is demand for local legal product down south, there will be money flowing back here to the farmers.

Volatile extraction unit signage

White is co-owner of the Humboldt Live Resin volatile manufacturing business and the Emerald County Statewide distribution company, both of which are operational now in temporary locations on-site. These businesses will move into the new building when it is ready to go. And, White says, on-site testing services will be available in the next 6-8 weeks.

For a sample of the style of marketing language Humboldt Live Resin uses, here is an excerpt from the mission statement on the informational sheet they distributed at the recent Humboldt County Growers Alliance Seed to Sale conference:

“Our mission is to transform plants into exceptional concentrate that truly highlights the hard work, generational expertise and strain diversity that makes Humboldt cannabis world famous.”

Humboldt Live Resin tech operating volatile extraction unit

Humboldt Live Resin offers “fresh frozen” extraction services, meaning they can freeze cannabis at the farm as soon as plants are taken down, then store the cannabis frozen until they extract. This process makes things easy for farmers, White says, because they don’t have to dry, store, process and market their crops.

Norms are shifting for cannabis farmers; fresh frozen is one example of how — in some cases — the days of trimmers are no more. The high demand for concentrates in the legal market is driving this particular shift. Developers like White and business people like Reuven and Bonnie Sherr are paving the way for farmers to adapt.

Volatile extraction unit on site

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Time will tell exactly how Rio Dell will benefit from embracing cannabis industry. But one thing is for sure: The city needs money.

Cannabis tax revenues for Rio Dell are general purpose funds, appropriated at the sole discretion of the City County. Some of these revenues could go toward Rio Dell’s shoddy roads, as state grants and allotments just aren’t cutting it. “Streets in Rio Dell need to be subsidized with local funds if the conditions are to improve,” Knopp says.

Or, cannabis tax revenues could go toward the expense of the city’s police force, as more than 60% of its general funds go this way already.

Ultimately though, a key component of any cannabis revenue taken in will be to invest in methods to diversify Rio Dell’s economy.

“Rio Dell’s condition today is largely a result of being dependent on one specific industry, timber.” Knopp says. “We need to look at cannabis as a means to an end,” he continues, a path toward a more diversified and stable economy and sustainable quality of life.

Such diversification and stabilization can be accomplished in many ways, but right now the city is focused on bringing the business park across the finish line.

“We want to turn Rio Dell into a success story where the catalyst of the story is the cannabis industry,” Knopp says. “A couple years from now, we want that New York Times article discussing how legalization has reshaped this small California town for the good… It’s very doable here in Rio Dell. Its mutually beneficial, and it doesn’t hurt that our business park has the best location in the heart of the Emerald Triangle.”

The broader community is certainly watching with interest. Perhaps Rio Dell’s warm welcome to the industry and possible success will sway neighboring municipalities or even other cities and counties in the state toward embracing cannabis commerce as well.

Note: An earlier version of this story contained a pdf from the City of Rio Dell that contained incorrect language. We removed the pdf after consulting with the City Manager.