“We don’t have to buy the idea that consolidation is inevitable.” – Hezekiah Allen
On February 24th, CGA and SCGA hosted a workshop entitled: Cooperatives – Strategies to Help Cottage Operators to Succeed. Speakers included Hezekiah Allen, Terra Carver, Casey O’Neill and Sequoyah Hudson. The purpose of the workshop was to focus on how the smallest and most vulnerable growers may be able to transition to the future to maintain small farms and cottage cultivator culture. The essential question posed by panelists and audience members was: How do we transition into the future of a regulated market and maintain small farm, cottage cultivator culture?
Challenges facing cottage cannabis cultivators were identified as:
- Land use regulations
- Capital improvements to property like roads, septic, infrastructure
- Inexperience with meticulous keeping of records, bookkeeping, paying taxes
- Costs of creating a brand and marketing it
- Compliance with water and local environmental regulations
- Access to political advocacy and representation
- Education on Best Management Practices
- Permitting process navigation
- Legal representation
- Access to capital, small business loans, etc
Cannabis co-ops are sprouting up in Mendocino, Humboldt and Sonoma counties as a way to address the needs of the cottage cultivator and medical patient.
The purpose of an ag co-op is to maximize the benefits generated for their membership:
This can be done through production, marketing or selling of agricultural products for its members. Harvesting, preserving, packing, grading, storing, handling, shipping or utilization of any of products of its members, or the manufacturing or making of the byproducts of any product of its members can be included in the cooperative model- along with the manufacturing, selling or supplying to its members of machinery, equipment or supplies.
This entity type is a non profit agricultural co-op association where only farmer-members can be owners. Cottage cultivators can join together and pool resources in order to access the regulated market. Cannabis co-ops can focus on innovating, sharing resources and adding value.
Small cultivators can come together to realize efficiencies of scale without losing independent ownership. Examples of the resources that can be shared and supported thru the cooperative model:
- Materials needed for production
- Method sharing
- Pest management
- Community morale and focus
- Preserving mutual support for the follow through
- Legal advice
- Compliance support
- Industry professionals (Engineers, electricians, carpenters, HVAC)
- Access to other groups (Watershed advocacy, environmental protection, etc.)
- Record keeping and tax prep
- Market access
- White-label access
- Political access
- Streamlined communication
- Access to banking (co-ops can create credit union).
Cooperatives allow small farmers to focus on values that get lost in investor owned corporations:
- Sustainability: conserving California’s natural value
- Community: good jobs and multiplied economic value
- Quality: producing rare strains that may have lower yields, or products that are more labor intensive.
The change happening in consumer behavior is based more on the back story and values. As a co-op, or alliance of co-ops who share those values, representing a much stronger voice and ability to communicate with consumers will evolve the marketplace.
Overall, getting organized as entity of small entities is what’s needed to impact a marketplace that’s profit orientated and typically inaccessible to small producers.
Currently ag co-ops are not specifically allowed for cannabis. However, through the policy work of CGA and other regional policy advocate groups like SCGA, these options are being developed today.
Imagine what 3,000 well-organized small growers could do together! Let’s not get bigger to compete, let’s get bigger to cooperate so our community can preserve the cottage cultivator culture that is the heart of the cannabis movement.
SCGA has an active Cottage & Co-op committee- please contact us if you would like to be involved.
See here for another article on cannabis co-ops.