California wildfires torch state's legal marijuana farms, leaving owners helpless

Given that the law prevents them from having insurance, farmers could lose everything

Published October 12, 2017 3:32PM (EDT)

 (AP/Rich Pedroncelli)
(AP/Rich Pedroncelli)

Several marijuana farms in Mendocino County, California have been destroyed as a result of the state's rapid spreading wildfires, leaving many business owners — who the law bars from obtaining insurance — without product as legal sales are set to begin in January, according to multiple news reports.

Since Sunday night, wildfires have spread throughout Northern California's wine country and have left at least 24 dead and hundreds missing, CNN reported.

More than 3,500 structures have been destroyed, and Gov. Jerry Brown declared state of emergencies in eight counties as 21 fires burn throughout the state. More than 191,000 were torched, "a collective area nearly the size of New York City," The Washington Post reported.

"This is not easy for anybody. We have firefighters who've either lost their homes or who have family members who have lost their homes," Jonathan Cox, battalion chief of the California Department of Forestry and Fire Protection explained, CNN reported.

Marijuana has been medically legal in California since 1996 and was legalized recreationally through a referendum during the 2016 elections. The state brought in $2.8 billion in medical marijuana sales alone last year, CNN reported. Legal sales are scheduled to begin this January and are predicted to create a more than $5 billion market.

Federal law does not allow cannabis cultivators to obtain insurance (or even use multi-state banks), which means business owners stand to lose out on the millions they have invested. Farmers usually "invest upward of $5 million in their facilities and as much as $3 million on growing the crop itself," CNN reported.

"Nobody right now has insurance," Nikki Lastreto, secretary of the Mendocino Cannabis Industry Association, told CNN. "They might have insurance on their house, but not on their crop."

"If their facilities burn down, a lot of these people won't be able to get any economic relief for them from an insurance claim," said Derek Peterson, CEO of Terra Tech, a cannabis agriculture company, according to CNN. "There's no mechanism for recovery to repay them for their loss. It's a tremendous risk for these people."

As of now, there is no clear estimate telling us how many of the 10,000 to 15,000 marijuana farms in the state have burned down so far. Moreover, it's a situation that weed farmers have found themselves in before, as wildfires in California have increased intensity in recent years.

The damages are "especially severe this year because many growers had spent their life savings getting local permits and preparing crops for state licensure and sales scheduled to begin Jan. 2," Hezekiah Allen, executive director of the California Growers Association, explained to The Los Angeles Times. Despite the damage, it's still unlikely to cause any shortage of marijuana as there are numerous farms throughout the state, Allen told CNN.

Nonetheless, some of the individuals providing that crop will be hurting. "A lot of plants have been lost in the fire, especially in Sonoma County," said Nikki Lastreto. "In southern Mendocino County, there are farms burning right now."

Though roughly 61 percent of Americans believe marijuana should be legalized, President Donald Trump's administration has hinted at cracking down on states that have legalized the federally illegal plant. Attorney General Jeff Sessions has long been anti-marijuana, and he may be able to begin crackdowns with the expiration of a budget amendment.

The LA Times explained:

What has become known as the Rohrabacher-Farr amendment constitutes a single paragraph of federal law. It prohibits the Justice Department from spending even a cent to prosecute medical marijuana users and sellers operating legally under state laws. Since its passage, it has largely shut down efforts by federal prosecutors or drug enforcement officials to interfere with otherwise legal sales of marijuana in 29 states and the District of Columbia that have passed legalization measures.

Still, it remains largely unclear if Sessions intends on cracking down on states with legal marijuana laws, or how he would even do so.

On a somewhat more positive note, the harsh winds that aided the spreading of the fires and exacerbated the flames have calmed on Thursday, and the National Weather Service said the calm winds should last through Friday, the Post reported.

"These fires are a long way from being contained, so we’re doing to best we can people that have been displaced and help them to hopefully rebuild their lives," Barry Dugan, a Sonoma County spokesman said, according to the Post.

By Charlie May

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