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Santa Maria Sun / Cover Story

The following article was posted on June 13th, 2018, in the Santa Maria Sun - Volume 19, Issue 15 [ Submit a Story ]
The following articles were printed from Santa Maria Sun [santamariasun.com] - Volume 19, Issue 15

Growing pains: From cut flowers to cannabis, Lompoc grapples with its past while eyeing economic opportunity

By SPENCER COLE

Dan Vordale’s boots crunch loose dirt and crumpled dead grass as he stomps through a neat row of waist-high flowers. 

“Ever since we came into this valley, the one flower we’ve grown is called stock,” he says. “It’s a big part of our company’s sales.”
Vordale is a vice president for Ocean View Flowers, a locally owned growing operation just a few miles outside of Lompoc. Founded in the 1990s, Ocean View has around 50 full-time employees with about the same number of part-time workers during peak harvest season. According to Vordale, his main customers are wholesale distributors and supermarkets, who purchase the thousands of flowers cut each harvest day for roughly $3 a bundle. 


ALIVE AND WELL
One success story for the cut flower industry and the Lompoc Valley is Ocean View Flowers, a locally owned company that manages hundreds of acres of stock flowers near Vandenberg Air Force Base.
PHOTOS BY JAYSON MELLOM

Business is good, he says, gliding between rows of stocks ranging from royal purple to fire engine red. All around him are fields filled with a rich palette of color. The air is redolent with the scent of blooming flowers and the less savory smell of manure and fertilizer that are essential to their lives. 

“You know, people always talk about how Lompoc used to be the ‘flower capital of the world,’ but it wasn’t,” Vordale says. “It was the flower seed capital.”

In the ’60s and ’70s, he adds, there were three or four major seed companies based in the area that both produced seed and grew flowers. That all changed in 1991, when Congress enacted the Andean Trade Preference Act (ATPA). The legislation encouraged countries like Bolivia, Colombia, Ecuador, and Peru to move away from growing coca—the plant used to make cocaine—in favor of flowers.

“That’s when the local farmers here started to move their growing locations to other parts of the world, and as our labor costs went up, they had to move because they couldn’t compete,” Vordale says. “They went to the same exact location in South America; places with the same climate just different times of year.

“They’re all pretty much gone now. There are no more seed companies here,” he adds. 

It’s a stark reality for an area like the Lompoc Valley, which attaches its identity and place in history to agriculture. Each year, the nearby city of the same name hosts an annual flower festival, despite acreage devoted to their growth diminishing each year. 

“We have lost a legacy in the production of certain flowers in the United States,” said Kasey Cronquist, chief executive for the California Cut Flower Commission. He told the Sun that the trade preference act created a disincentive for traditional domestic flower farmers and ultimately pushed them to explore other crops. 

One of those is cannabis, a plant that has already proved controversial throughout California, taking the spotlight at countless city council and board of supervisor meetings as both a potential economic goldmine and catalyst for societal destruction, depending on the speaker. It’s an argument that has dragged on ever since Proposition 64’s passage and highlights an identity crisis Central Coast communities face amid a booming green rush. 

Mark Lovelace, a former Humboldt County supervisor and now a consultant for the firm HdL—which advises Santa Barbara County on marijuana regulation—told the Sun that the debate about cannabis in Lompoc and other municipalities often came down to a two-pronged ideology. 

“It’s a little of, ‘What kind of conservatism do you fall on,’” he said, “pro-business or anti-cannabis?”


Growing Pains
From cut flowers to cannabis, Lompoc grapples with its past while eyeing economic opportunity
PHOTO BY JAYSON MELLOM

Most Central Coast cities have already picked their side: Santa Maria, one of the largest, banned cannabis in all forms with the exception of medical delivery earlier this year. 

“I feel strongly about eliminating marijuana in Santa Maria as much as we can,” Councilmember Etta Waterfield said the night the pot ban passed. 

Then there’s Lompoc, roughly 28 miles south, with less than half the population of its northern neighbor and the polar opposite when it comes to marijuana regulation. With virtually zero restrictions on retail, processing, manufacturing, and cultivation, the city aims to be a hub for tourism bolstered by the nascent cannabis industry. 

But despite the actions of its council and the promises of economic growth, marijuana business owners still have their opponents in Lompoc, ranging from its mayor, to irascible outspoken public commenters at city meetings, to a bona fide referendum effort by a group of citizens that ultimately fell short of the required signatures.

The opposition created a climate that prospective cannabis cultivators in the area will have to carefully navigate as they weigh the costs and benefits of making the switch from flowers to pot. Cronquist said the Cut Flower Commission and the farmers he represented looked at growing cannabis as nothing more than a viable alternative among alternatives. 

“Farmers have to always decide what kind of business they want to get into,” he said. “Do they want to grow tomatoes or do they want to grow lettuce? Diversification is job No. 1 for a farmer. They are always looking at market conditions and trying to determine their place in it.” 

Dangerous designation 

In some respects, it’s ironic that marijuana is being grown in Santa Barbara County at all. Farmers will tell you the only reason the cut flower and seed industry in Lompoc and Carpinteria failed is because of a Schedule I drug, cocaine. The federal Drug Enforcement Administration classifies all substances and drugs with a specific number, ranging one through five, depending on their “accepted medical use” and the “drug’s abuse or dependence potential.” 

Schedule V (five) drugs are what the agency defines as having the lowest potential for abuse. It lists examples such as the over-the-counter cough medicine Robitussin, along with prescriptions for nerve pain, like Lyrica.

On the other side of the spectrum is Schedule I—drugs deemed to have a “high potential” for abuse and “severe psychological and/or physical dependence.” Marijuana is the third drug listed on the DEA’s website as an example, right next to heroin, LSD (lysergic acid diethylamide), and cocaine. 

So although Proposition 64 legalized recreational cannabis in California, and despite the fact that it’s been legally grown and consumed statewide as a medical crop for more than two decades, the plant is still considered a dangerous, controlled substance, at least as far as the federal government is concerned. 

That status is the chief reason why the half-dozen cannabis cultivators interviewed for this story declined to comment on the record due to fear of legal repercussions from the state or federal government while their farms come into compliance with California’s licensing process. 

But the wheels of economic change keep turning, and now greenhouses from Carpinteria to Lompoc that had their cut flower businesses wilted by cheaper South American iterations will grow another drug deemed illicit by the federal government.

Mollie Culver with the Santa Barbara County Cannabis Business Council told the Sun that farmers making changes to more profitable crops is nothing new. 


DECLINING DOMESTICALLY
The United States’ and California’s cut flower industry took a hard hit after Congress passed an act in the 1990s giving South American countries trade preference to discourage the growth of coca.
PHOTO BY JAYSON MELLOM

“Santa Barbara County has always had a rich agricultural tradition, but the marketplace changes, sometimes within a generation,” she said. “It’s absolutely critical that the agricultural industry be able to adapt to that changing marketplace, which is driven by not only consumer demands, but by regulatory forces and foreign competition as we’ve seen here locally a lot. So to have the ability to switch and integrate new crops is essential for long-term sustainability.”

That logic holds especially true in the flower industry, which has suffered high attrition rates for decades due to farmers transitioning to more profitable, stable income sources. Since 2004, domestic production declined from 43 percent to 27 percent, according to data compiled by California’s Cut Flower Commission. Meanwhile, imports of cut flowers have increased from 57 percent to 73 percent of the U.S. market share. 

“There have been shifts in the industry that have created both issues and opportunities that have in a number of ways put us at a disadvantage with the cheaper priced imports coming into the market,” Cronquist with the Cut Flower Commission said. 

Before the passage of the trade preference act in 1991, domestic producers’ sales accounted for 75 percent of the market. That number now sits at just about 25 percent. California saw its U.S. market share dip from 45 percent to 21 percent over that same time period. 

These relatively dismal economic conditions domestically have pushed some farmers to eye a crop long labeled taboo in certain circles. 

“Some people will say, and I think this strikes to the irony about some of the farms—not all of them, but some—right now, we are looking at about a 10 percent displacement of [farms by sale] year over year,” Cronquist said. He added that the sales may not all be a result of farmers switching to pot, but “it is assumed to be because of that though. Farmers look at it and see a crop that has a couple things going for it.” 

Back at Ocean View Flowers in the Lompoc Valley, Vordale mentions the declining domestic production, but notes how well the local company adapted to changing demands. 

He says that even though Ocean View now cultivates fewer acres than it did in the past, the flower firm has found a way to maximize efficiency and profits. 

“We’re pretty positive about the direction of where we’re going,” he adds. “I think we’re still in a shrinking market here in California, but I don’t think we’re going to see it that much in our company. It’s definitely been challenging to stay competitive and profitable. To be able to deal with rising prices, our input costs keep going up, labor costs keep going up, we’re having a huge issue of labor and trying to find it. So there’s lot of pressures on us to do that and compete, but I think because of our size we’ll be able to navigate those problems.”

Although Vordale’s company doesn’t grow marijuana, and has no plans to make the switch, it’s inevitable that some flower farmers in the area would turn to pot as a potential crop amid fierce international competition, he says. 

One advantage cultivating cannabis offers is it utilizes similar facilities to what cut flower growers were already employing, like greenhouses. The buildings provide cheap sunlight, are easily warmed during the day, and cool to ideal temperatures at night for cannabis to thrive. Most importantly, Cronquist explained, the structures give growers control over their plants’ environment. 

He said another benefit for farmers interested in shifting their crops to cannabis is limited international and out-of-state competition. 

“I think that’s an important point to bring home: It’s not because it’s cannabis, it also is because of the Schedule I [designation],” he added, “that makes it impossible for other states to compete with California on this particular crop. The other reason obviously is that countries like Colombia—that our farms are used to competing with—aren’t able to also legally bring their marijuana into California for sale.”

Cronquist said the Cut Flower Commission viewed such a move as one farmers make to protect their investment against competition. 

“If you want to imagine how cut flower farms would look today, you don’t have to go too much further than the [cannabis] nursery guys,” he said. That’s because nurseries grow young plants in potted soil, and even if they had international competition, it couldn’t affect their domestic market because the U.S. prohibits importing foreign soil due to potential disease and pests that could be brought over with it. 

“So we have farmers leave cut flowers to go into potted plants for those protections, and in some ways it’s the same thing we are seeing now: shifts from farms to get away from the cheap competition and move into products where they don’t face the same trade issues cut flower farmers face today,” he said. 

Green rush 

As of June 4, Santa Barbara County had a total of 971 state-temporary cannabis cultivation licenses issued. 

Assistant County CEO Dennis Bozanich explained that the number of licenses translates to roughly 240 acres of pot being grown countywide, which pales in comparison to the tens of thousands of acres devoted to strawberries, broccoli, and grapes stretching from Carpinteria to Santa Maria. Regardless, the county’s number of state licenses places it firmly in the lead among similar counties, according to California’s Bureau of Cannabis Control. Santa Barbara County’s total surpasses even Humboldt County (718 licenses), home to the emerald triangle, formerly the epicenter of marijuana grows in the country. 

The largest concentration of those licenses are in Lompoc and Carpinteria, two areas famous for cut flowers and, especially in the latter’s case, greenhouses. 

“Those are definitely the two hotbeds,” Bozanich said, adding that a third of the licenses are located in Lompoc, while another quarter were in Carpinteria. Next is the Santa Ynez Valley, which has similar numbers to Lompoc. The rest of the licenses are dispersed throughout the county fairly evenly, with the lone exception being Tepusquet Canyon, which Bozanich said accounted for roughly 12 percent of all licenses. 

He added that the number of licenses would actually probably go down, at least over the next year. 

“What’s happening is people are realizing that with the state regulations and everything else that they don’t need as many licenses as they thought,” Bozanich said. 

Another potential occurrence is a reduction in medical cannabis operators due to consolidation, partially driven by expenses related to licensing, especially with California moving away from the free, temporary versions it issued en masse to help cultivators stay compliant with the new laws that came after Proposition 64 passed.

“Now they have to pay for it. Those temporary licenses were free, and like anything that’s free, you probably take more than you need,” Bozanich said. “Now that they’re paying more, and are being forced to consolidate in some cases, they’re going to think more strategically about how they pay.” 

However, those developments should be balanced by new operators seeking local county and city permits or licenses, along with larger firms pushing for state licenses and new operators that weren’t grandfathered in like a lot of California’s medical cultivators. 

“We could easily see this thing growing significantly quicker going forward than it is currently,” he said. 

Reefer madness 


JOLLY GREEN GIANT
Santa Barbara County’s tax revenues from sale receipts on recreational marijuana are estimated to be in the tens of millions of dollars by next year.
PHOTO BY JAYSON MELLOM

Cannabis may have come a long way toward legalization over the past 20 years, especially since Proposition 64, but the stigma surrounding the plant remains. Council meetings countywide are filled with public comment chock full of complaints ranging from concerns about how marijuana will bring in crime, rampant drug abuse, and corruption of youth. 

In August 2017, Lompoc Police Chief Pat Walsh referred to cannabis as more impairing than wine for motorists and urged the City Council not to pass an ordinance allowing its sale in city limits. Walsh has since walked back those statements in interviews with the Sun after councilmembers passed a laissez faire ordinance that originally allowed the industry to operate tax free. A few months later, the council passed a revised ordinance proposing a tax measure for the November general election ballot. 

However, complaints about pot remain a common occurrence at council meetings, and the issues citizens seem to have with it largely stem from how its availability in city limits for sale, growth, and processing could change the community’s core identity. 

“That’s what we’ve had to work through is all the ideological objections,” the Cannabis Business Council’s Culver said.
Joe Garcia, a founder and activist with the Lompoc Valley Cannabis Coalition told the Sun that the negative connotations surrounding marijuana were nothing more than fear-based “reefer madness,” and often ignored the myriad medicinal benefits the plant offers. 

“People are afraid of things they don’t understand,” Garcia said, arguing that many cannabis opponents in the city don’t realize how many locals stand to gain from it, and not just through tax revenues. Santa Barbara County’s consultant, HdL, told the Board of Supervisors in December 2017 that as much as $21 million in taxes on receipts alone could be collected after the first fiscal year. 

“This is going to benefit the entire local economy,” Garcia said. 

In may cases, Culver noted, a lot of the area cannabis farmers, both prospective and current, come from multigenerational farming families looking to make agriculture sustainable and to continue their traditions. These aren’t just outsiders trying to make a quick buck. 

“Let’s be honest, we’re still largely a rural county, and we don’t have a huge consumer marketplace,” Culver said. “I see really an opportunity in Santa Barbara County for people to be flexible in their agriculture crops, to continue to have sustainability, to have success. … Besides, Lompoc has an increasing tourism market: The Santa Rita hills are gaining international fame for producing great wine, and we have an ag industry that has prowess in certain areas. I think it benefits the entire Lompoc Valley to continue to build on those strengths. 

“It doesn’t help the valley if we have farmers succumbing to market forces who are unable to switch to profitable crops to help augment their traditional farming,” she added. 

As for the so-called “criminal element” marijuana opponents say its legalization brings, one cannabis cultivator—who requested anonymity as their farm transitions with the state to come out of the black market—compared potential marijuana buyers to wine country patrons. 

“People who are traveling here for cannabis or wine tourism are not bad elements,” they said. “We don’t have gang members from LA coming up to buy their weed in Lompoc.” 

As Vordale concludes his tour of Ocean View’s hundreds of acres of flowers, he pauses, and examines his stock. 

“The cannabis deal is a big, big swing for our industry,” he says. “It’s a huge shift. All the growers in Carpinteria pretty much have moved into growing cannabis just because the revenue’s so much higher than cut flowers, and I think they kind of want to be in that first wave of making the big bucks. 

“I don’t know where it’s going to go,” he adds. “I don’t know if its good or bad, but it is what it is.

“It truly is a gold rush.” 

Contact Staff Writer Spencer Cole at scole@santamariasun.com.




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