Letter to the Editor: ‘Mendocino Government Sends “Courtesy” Letter Threatening Livelihood of Local Farmer’

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Honorable Supervisors,

I am writing you out of great frustration and dismay regarding what I can only characterize as our local government’s discrimination against and mistreatment of my businesses. More globally, I am also acting as a voice for members of Mendocino County’s legal cannabis industry.

My name is Russell Green. I am the founder, CEO and single shareholder of Kure Wellness, Inc. I grew up in Willits, lived here my entire life and raise two children in my hometown.

My Mendocino County roots are deep. My grandfather, Richard Gravier owned and operated the Chevron Station in Laytonville for 33 years. My maternal great-grandfather Chet Merrill owned Merrill’s Variety and created the Red Buck Lodge in Laytonville back in the ‘40’s. My other maternal great-grandfather, Mervin Gravier was the co-owner of Gravier Brothers Mercantile in Covelo, and my paternal great-grandfather Cummins was one of the lead engineers who designed the Cedar Creek double-arched bridge in Leggett. I owe a profound debt of gratitude to my ancestors, who paved the way for the entrepreneurial accomplishments I enjoy today.

I was the fortunate recipient of the first Cannabis Facilities Business License in Mendocino County. I hold the distinction of being the only “Mendocino County son” who owns and operates dispensaries in our region. In just five years, I have expanded my retail footprint from one to three licensed dispensaries and additional cultivation sites, all located on this land I love- working for and serving the community I love even more.

I am requesting an email sent to me on July 13th by the Cannabis Division be rescinded. I am requesting a joint meeting with the Building and Planning Department and the Cannabis Division to resolve questions regarding my cultivation site’s license renewal application. I request an acceptable path forward on the month-to-month temporary approval status of my drive-through dispensary window, with consideration of my attorney’s opinion that planning can approve it if they would like. And finally, I ask you to mandate that the above agencies adopt a timelier, more customer-focused public communications policy, and that threats to revoke or actual revocations of cannabis licenses be strictly limited to criminal, non-responsive, or grossly non-compliant applicants.

Like my colleagues, the majority of my time is spent attempting to comply with local and state regulations. My efforts often become more complex, in part because of a years-long pattern of untimely and sometimes incomplete responses by county staff.

Despite clearly documented efforts to communicate with licensing agencies, I recently received a threat of license revocation for my permitted greenhouse operation- replete with arbitrary deadlines and “threats” that I am in danger of losing my license.

The particular property in question is not some stereotypical, treeless “grow site.” It is our family homestead- originally my father’s property, sold to me. As this is my children’s legacy, I care greatly about development and doing it properly. Application renewal submittals were emailed on November 18, 2020. They were not responded to until mid-April of this year.

On Thursday, June 10, 2021, I emailed the B and P Department for parcel number clarification I needed to complete the property’s cultivation renewal package. We specifically asked the department to respond in the modality easiest for them- email, appointment or phone. Perhaps my mistake was assuming I would receive a timely response- or any response whatsoever. Instead, I received a letter from the Cannabis Division on July 13th, stating my cultivation permit had expired, and that “failure to renew your permit in the 30 days provided will result in your permit being ineligible for renewal.”

We re-forwarded my original email to the Planning Department- informing them we had now received an expiration notification from the Cannabis Division. For the sake of transparency, I cc’d both emails to the Cannabis Division. I received a terse and infuriating response from them- with no one acting as signatory, stating, “This is not a matter that the Cannabis Program can assist you with.  I have blind copied the planner that issued the Kure Wellness cannabis permit.”

Shortly thereafter, Mr. Vandy Vandewater from B and P responded to our original request for information. I am aghast that despite my years of full cooperation with the county, I did not receive a shred of acknowledgement from the Cannabis Division that a communication failure originating just a few doors away from their office resulted in my missing this arbitrary deadline.

I utilize “temporary shade cloth structures” at my cultivation site. Despite extensive research, I am still unsure they require permits. These structures are “old technology” and have deprecated as the path toward auto-dep greenhouses has become clearer. I have had numerous questions requiring responses from the county before I could confidently move forward with permanent building placement- the definition of “contiguous,” questions regarding grading the property or cutting down trees.  I haven’t yet funded permanent greenhouses because in part, I feared the county would revoke licenses or change rules- and that’s exactly what’s happened, despite the fact that this currently zoned RR-5 parcel has a lengthy, unambiguous history as an Ag property and was once zoned as such. Would any businessperson in any industry pour concrete for permanent structures without knowing if their parcel was about to get stricken from a “table?”

Years ago, our family ran a large-scale ostrich livestock operation on the parcel, where we raised, slaughtered and sold ostrich meat, eggs and hides- replete with clean rooms and incubators. The prior owner of our land, Ms. Bertha Cook operated a commercial flower farm on the site- complete with greenhouses. This property has an LSAA, on-stream pond storage permission, SIUR and pre-1914 water rights. If there ever was a bona-fide Ag property, I can’t imagine one more perfectly suited to grow hay, flowers or legal cannabis. Yet come permit time, I continue to be treated as someone who is trying to thwart the system or am simply ignored.

How did we get to this impasse? The Black Tail Deer lawsuit. The sudden “retirement” of Ag Commissioner Diane Curry. Vacancies left by former Supervisors Hamburg and Woodhouse- resulting in empty Third and Fifth District seats during key policy votes. Big money lobbying from the shadows. What other challenges do we live with?

• Continued fallout from recovery from several of the largest fires in the history of California and the ongoing threat of PSPS and evacuations- both of which may result in total crop loss in the space of 24 hours.
• Continuing to work through the pandemic with minimal support from regulatory agencies.
• No “right to farm” clause. In this case, there is a preponderance of documentation demonstrating my cultivation site has been used for commercial agricultural enterprises for a minimum of 70 years.
• A shortage of architects due to post-fire rebuilds, thereby slowing the completion of cannabis projects.
• No access to banking.
• The closing of employee accounts merely for being employed by a cannabis business.
• No way to remit taxes except cash

• Temporary permits (embossed receipts… really?)

The cannabis permitting and licensing process is a daunting, expensive enterprise that continues to hamstring an industry that worked thanklessly through the pandemic- continuing to feed county coffers while employing hundreds of folks and providing recreational and medicinal products to tens of thousands of people- many who travel significant distances to shop at Mendocino County dispensaries.

My travails are shared by scores of taxpaying businesspeople. Despite reams of evidence pointing to the safety and economic benefits of legalization, the growing and selling of cannabis continues to be the most improperly, wrongly regulated and overtaxed industry in American business history.

At a 2018 gaveled-in California State Cannabis Hearing, Mendocino County’s former Agricultural Commissioner Tony Linegar stated, “If the overall goal of this program was to create a regulatory scheme to favor corporate, big-dollar industry, we’ve succeeded. If the goal was to create a regulatory pathway for existing cultivators to become legal, I think we’ve failed.” Mr. Linegar- an unrivalled expert on Ag regulations, water, ranching, forestry and viticulture called out CEQA and other environmental regulations as “over the top,” and declared, “Any other Ag industry would be run out of business,” if they were required to comply with current cannabis regulations. He saw no compelling reason to regulate cannabis differently than other crops, while characterizing the regulatory and taxation burden that cannabis farmers carry as “exponentially disproportionate” in comparison to other parts of the agriculture community.

Did lawmakers heed Mr. Linegar’s admonishments? It appears his cautionary statements had no impact whatsoever on our policies.

We continue to be taxed into oblivion.

Local cannabis taxes are paid atop state excise taxes. Is this not double-taxation? During the pandemic, Mendocino County operated in lockstep with the state, casting doubt on the local governments sovereignty from state government- possibly nullifying the argument that, “It’s not double-taxation because we are separate governments.” Which is a bad justification given to me by county staff anyway.

Kure drops approximately $80,000 in taxes per year into the county’s revenue stream. Between myself and my family, we pay another $100,000 annually in property taxes. We are the lucky ones, because we have sufficient assets to provide for our employees, grow our businesses and support our children. What of the small farmers, hanging on by a broken thread- hoping against hope that per-pound prices will miraculously increase, or that the mind-numbing miasma of regulations will somehow work to their advantage?

When Mendocino County grants what are essentially vested property rights, and then, as in my case- denies that said property exists, I become a victim of taxation without representation. Please explain how the cannabis industry is represented when law-abiding businesses are subject to:

• A seemingly endless parade of cannabis departmental shifts (from Sheriff to Ag to B and P to the current cannabis program), with no continuity provided during departmental transitions.

• Astronomical levels of staff turnover.

• Documented promises and assurances provided by county staff regarding the approval of my drive-through window that were later reneged upon.

• The shuttering of public access to government buildings, with lack of access further compounded by non-response when phone or in-person appointments are requested.

• County staff not responding to urgent emails, while simultaneously decreeing strict adherence to deadlines.

• Departmental buck-passing (i.e., three separate departments “blaming” each other for lack of communication or lack of knowledge- ostensibly to skirt accountability)

• Lost documents which were duly submitted to the county.

• A less-than-scientific focus on drought-driven cannabis water restrictions (read the findings of UC Davis researchers on how little water is really used by legal cannabis farms) with limited or non-equivalent restrictions required of other agricultural enterprises.

• A newly minted Code Enforcement division which thus far seems focused more on mitigating low-hanging dozens or hundred-or-so plants, as opposed to eradicating environmentally disastrous, patently illegal multi-thousand-plant mega-grows in remote localities.

Everyone deserves equal protection under the law. No single industry should be subject to discrimination or abuse. Embossed receipt holders awaiting the launch of the cannabis portal received a 90-day grace period to file paperwork. The fact that I already have a permit apparently means nothing. I am provided only 30 days to comply, despite months of non-communication from your side of the net. This seems like an arbitrary edict designed to harass, not to assist.

What other industries require their own county department? Is there a Winery Department? A Tire Shop Department? The fact that a “Cannabis Division” exists is direct evidence that this industry is being singled out and treated exceptionally and unequally under the law. Wine and beer are psychoactive, lucrative county industries. The entire acreage of legally cultivated cannabis could tuck into a couple of vineyards between Ukiah and Hopland. As Mr. Linegar opined, could the wine industry survive under cannabis regulations? It’s doubtful.

More voters and legislators continue to voice their desire to end Prohibition, locally and nationally. Instead of being at the vanguard of clean, craft cannabis, celebrating our heritage and the culture that surrounds it, Mendocino County cannabis licensees live in “Prohibition 2.0.”

Cannabis is our livelihood- expressed through the will of the voters and sanctioned by the passage of state and local laws. Once livelihoods are codified, citizens rely upon that industry’s continued existence. We have only to look to history to see the consequences of threatened livelihoods.

The amount of psychological distress and PTSD in our industry is no joke. Like Sheriff Allman recently stated, mental health- not cannabis- is our county’s biggest challenge. Cannabis entrepreneurs and their loved ones are being disproportionately affected and destroyed, not just financially, but emotionally- in part because for years, we have been forced to live and work within a topsy-turvy regulatory nightmare. Does anyone wonder why more farmers aren’t joining the program?

Imagine if Mendocino County had found farm subsidy funding for cannabis industry fire victims, or if aggressive county pressure helped to secure local banking. In my case, imagine if the county offered unambiguous support for our drive-through window at our flagship store, instead of contradictory pushback. Many of our drive-through customers are disabled. Some are seniors. Some wish to socially distance or don’t want to leave their pet in a hot car. We have a minimum of 5 drive-through businesses within 5 miles of my dispensary, including a bank and a pharmacy. Please provide one cogent reason why a drive-through cannabis window- staffed by professional dispensary operators, located on property that has historical “in-and-out” traffic patterns can possibly pose a community detriment.

What is the status of the $18 million in “Newsom cannabis funding” the county is slated to receive to help push provisional licenses to the finish line? Where are we in this process? Why has there been no communication to licensees?

I implore each of you to step back and consider the futures of those you took a sworn oath to serve. If “courtesy” letters threatening my livelihood are routinely sent to cooperative, compliant businesspeople like myself, the system is broken. This is not about regulations. No amount of regulation will replace the basic tenets of good management: an expectation of courtesy towards the public, timely communications response and the decency of putting a human face or a name to any and all correspondence.  When cannabis is removed from the Federal Controlled Substance list, it will likely be illegal to harass taxpaying citizens in this fashion. More to the point, it’s just not right, and I can no longer be silent.

My requests:

• Please instruct the Cannabis Department to rescind the 30-day cancellation letter and instruct them to renegotiate a reasonable cancellation date after the following:

• I request a face-to-face or other appropriate meeting with both the B and P and Cannabis Division to discuss any lingering questions regarding the submittal of my renewal application for cultivation site AG_2017-0272.

• Please bring resolution to the current “month-to-month” status of Kure’s drive-through location at Lake Mendocino Drive. We have committed in writing to any and all improvements or modifications recommended by the Building and Planning Department.

• Require that both departments commit to a 72-hour maximum response to emails and phone calls- a response which includes a staffer’s name and direct contact information, an inclusion of dates and times that staffer is available for appointments, and the creation of a few “emergency” time slots weekly- specifically allotted for those who are in danger of license suspension or cancellation.

• Please only resort to the use of threatening language or actual revocation of cannabis licenses as a method of last resort- to be utilized in extreme situations such as gross environmental destruction, commission of serious crimes or a licensee’s documented lack of response to the Cannabis Division.

Thank you very much for listening. I appreciate the time taken to address these issues and hope that we can come to an outcome that will positively benefit everyone in our community.

Respectfully,

Russell Green, CEO, Kure Wellness Inc.