California’s Legal Cannabis Farms Help Push Out Illegal Growers, Study Shows

Regulated cannabis farms are the best defense against illegal growers than government crackdowns and bans. That’s according to a new study from UC Berkeley Cannabis Research Center.

The researchers looked at a surge in large, licensed cannabis farms along California’s central coast, which are often financed by venture capital and utilize vertical integration by controlling farming, distribution, and retail.

Researcher Christopher Dillis, who is involved with the study, said licensing can cost cannabis growers between $50,000 up to over $100,000, as it encompasses extensive permits and regulations, reported The Daily Californian. Moreover, the process can take up to 1–2 years due to sluggish state bureaucracy.

In order to be licensed, a cannabis farm has to meet infrastructure standards such as engineered roads, compliant irrigation systems, and proper water storage. For farms that have been operating in the space without a license, it’s hard to meet these requirements, as they are often located in remote areas that are difficult and expensive to modernize to current code standards.

Penalties for illegal cultivation are another deal-breaker as they are severe, reaching up to $30,000 per day in Los Angeles County, for example. That said, licensed farms reportedly provide “anonymous tips” to authorities about nearby unlicensed growers, Dillis said.

Even though the Golden State initially “favored” small businesses in terms of license issuance, some farmers utilized a loophole in the law that allowed large operators to “stack” multiple smaller licenses.