Jack Green*, a fifth-year economics major at UCSC, speaks two distinct dialects — professorial jargon and slang — and seamlessly switches between them during our conversation. He wears big, flashy sunglasses and old, tattered flannel shirts: part big city, part old country. He is smart, savvy and always smiling. Easy to talk to, hard to dislike.
A self-proclaimed “farm boy,” Green said that while growing up on his parents’ organic produce farm in Humboldt, Calif., he learned to work with his hands and manage crews of workers in the fields. He uses these skills to run his indoor and outdoor marijuana-growing operations around the northern and eastern parts of the state.
However, he spends most of his time on the phone, playing middleman between growers and dealers and getting paid on commission.
“I live in a gray area, because it can occasionally be pseudo-legal what I’m doing, but I definitely push it,” Green, a medical marijuana card holder, said.
He explained that since the implementation of Proposition 215, the 1996 proposition that legalized medical marijuana in California, it has become increasingly common to grow weed throughout the state.
The flooding of the market means less money for him and other Humboldt cannabis growers.
Green said that Proposition 19 will threaten the market, driving marijuana prices down and forever morphing his small, offbeat county, tucked into the California’s forested North Coast.
The initiative, to be voted upon next Tuesday, would legalize the growing and smoking of marijuana for California adults and allow each county throughout the state to decide how to regulate its sale and taxation.
For the last 30 years, the Emerald Triangle — the Northern California counties of Mendocino, Humboldt and Trinity — supplied a majority of the outdoor marijuana to California. But now more and more Californians grow weed, and Prop 19 will only fuel the growing trend. In the 1980s, Humboldt pot would go for $4,000 a pound, but similar weed today sells for only $1,600, Green said.
The saturating market already threatens the economic survival of the Emerald Triangle, Green said. Were Prop 19 to pass, the anticipated addition of many new growers would further weaken the counties’ main cash crop.
Marijuana accounts for an estimated two-thirds of Mendocino County’s gross domestic product, according to a study commissioned by the county this year. Green estimates that cannabis’s economic impact is similar in the other two counties.
“On paper, Humboldt County looks God-awful — it is impoverished as shit,” he said. “The average earnings are so bad, but people are living a very comfortable life. There are a lot of $3 cups of coffee being sold to a bunch of poor people — supposedly poor people.”
The marijuana business powers the county, Green said. Even those not growing or selling are affected by the trade.
“All the car sales, all the doctor’s appointments, all that shit is in cash,” Green said. “Everyone has a hand in it. Everyone profits. At this point, if you are living in Humboldt and talking shit about the weed game, you are obviously retired, because otherwise you should be worried.”
If the business of growing continues to shrink, Humboldt’s “poor” may begin to actually struggle. In addition to Prop 19 making the growth of marijuana for personal use throughout the state legal, the city of Oakland has said it will allow warehouse use for the growth of hydroponic marijuana if the initiative passes. With such widespread legal production, the demand for Humboldt’s main cash crop will diminish.
“It’s going to fucking destroy [Humboldt]. Destroy it,” Green said, the grin leaving his face. “There’s nothing up there. There is a college, there is no other industry.”
On the other hand, Evan Nison, campus organizer for the “Yes on Prop 19” campaign, said the Emerald Triangle will thrive under legalization. He said the growers are sounding the alarm, but “they are not the economists.”
As proof, Nison cited an April 24 meeting held in Ukiah, Calif. called “Life after Legalization: Marijuana Enters the Mainstream,” a forum and workshop held by the Mendocino Medical Marijuana Advisory Board and Cannabis Law Institute. He said the discussion ended with a hopeful resolution: After legalization, the Emerald Triangle would become “the Napa Valley of cannabis” — the purveyors of fine cannabis to California’s high-class smokers.
Besides growing weed, Humboldt has a large contingent of organic farmers, but in recent years, corporate farming has made the family farm a losing industry. The 2003 Humboldt County Agricultural Survey Final Report concluded “that the majority of local producers are financially ‘just making it.’”
Green said his parents stopped growing marijuana when he was 10. Since then they have grown organic produce but have struggled to compete with the prices of corporate competitors.
“Because of where agriculture is at in this country, they haven’t made shit for money and are still ridiculously broke for how hard they work,” he said. “They are selling to people who just go to Safeway, who don’t want to pay $4 for a tomato.”
Some fear that if Prop 19 passes, the business of marijuana will be taken over by the same corporations. Based upon the current legislation, it is hard to tell whether large-scale investment will be allowed. The proposed law leaves lots of gray area, allowing each county to regulate the business of marijuana as it sees fit.
For years there has been an urban legend that the Marlboro Company has already patented Marlboro Greens — a cigarette filled with marijuana to be sold if weed is legalized. Though this is just a myth, the corporatization of the industry may not be far off.
There is an “estimated $15 billion in illegal cannabis transactions in California each year,” according to the initiative measure of Proposition 19. California’s current total farm revenue stands at $36 billion per year, meaning the addition of marijuana would mean a one-third jump in agricultural revenues. Between 1978 and 2007, the number of corporate farms in California almost doubled from 3,871 to 5,750, according to a UC Davis report.
It stands to reason that, if marijuana becomes a legal crop, corporate farms would move into the untapped and lucrative industry.
“You can’t compete with an economy of scale,” Green said. “If it wasn’t illegal, you could grow it like you grow all other agriculture, factory farmed with diesel tractors. Two guys will grow 8,000 pounds and prices will plummet.”
Frank Leer*, a small dark-haired second-year at UCSC who deals marijuana, said he makes about $100 for each ounce he sells. He said that people pay dealers for the risk they are taking. Leer believes that legalizing weed will absolutely hurt his business.
“I think prices eventually will have to go down, because there will be so much more production of it, since there is no risk of being thrown in jail for growing it and distributing it,” he said. “The cost of production isn’t that high.”
Professor of economics David E. Kaun explained that the illegality of the product is one of the main reasons for its expense.
“To some extent, the supply is limited because you’re taking a big fat chance,” he said. “It’s an illegitimate business, it is an illegal business, and that is why it is profitable.”
Kaun explained that though demand would most likely increase with legalization, supply would rise at a much faster rate, driving prices down.
Despite Green’s concern that large conglomerations would dominate the marijuana market just as they dominate produce sales, campus organizer Nison argues that just as there is a market for both fine wine and Two-Buck Chuck, the multiple grades of marijuana sold in the legitimate cannabis market will protect small business.
“The current mom-and-pop growers will definitely have their place in that market, having the higher quality product,” Nison said. “The larger companies that will form will not be able to produce the same quality and will produce the lower-grade, cheaper cannabis.”
But there is so much money in the weed industry that high-quality weed will eventually be grown on a large scale, Green said.
“If they can put in 4,000 acres of climate control greenhouses, it won’t be schwag [low-quality weed],” he said. “Once you can actually apply that kind of money to it — once you have $4 million in investment cap[ital] and you can pay somebody a salary to make sure your lab is on point, and your clones are perfect and the genetics are perfect, and your machines to harvest and water are perfect — you just kill it. How the fuck is some high kid in his garage going to compete with that?”
And the “high kid in his garage” is not the only one who cannot compete. If the cannabis market becomes corporatized, most of the profit from marijuana sales will go to shareholders.
Green said he knows many Humboldt families who can afford to live the way they like, on their properties far out in the country, only because of the money they make from their one dependable cash crop: marijuana.
“They are going to have to leave once the margins are gone,” Green said. “The miners have to leave the hills when the gold runs out.”
However, with the recession, the gold may have run out in California. With the unemployment rate at an astounding 12.4 percent as of this past August (It was four point nine percent in August 2006), proponents of Prop 19 argue that the legalization of marijuana may help the damaged economy.
Policing marijuana-related crimes costs the state money it would save with the implementation of Prop 19, Kaun said.
“There is no question this bears on the legal system and that would go away,” he said. “There is no question that would be tremendous savings to the state. Whatever the extent, the state is using resources to police this — and that figure isn’t zero.”
In fact, the figure the state spends on marijuana-related law enforcement is far from zero, Nison said.
“Cannabis prohibition has failed. We are arresting 60,000 people a year in California alone,” Nison said. “We are wasting $60 million in law enforcement costs and we are not reaping the benefits of a $14 billion industry by getting any of the tax dollars from it.”
However, Roger Salazar, communications director of the “No on Prop 19” campaign, said that the initiative’s language leaves massive loopholes and gray areas in terms of taxation and law enforcement.
“The initiative doesn’t do any of things it claims it will do,” he said. “It won’t tax, regulate or control marijuana in the way proponents claim. It won’t generate the kind of revenue proponents say that it will.”
In Salazar’s view, the flaw is that there is no uniform statewide tax system, or uniform statewide legal system, set up to deal with the proposed legalization.
“The biggest concern is that the day after this initiative passes, if it were to pass, you’d be able to possess marijuana, you’d be able to use marijuana, you’d be able to drive with marijuana, you’d be able to grow it and cultivate it,” Salazar said. “But there is nothing set up that would guarantee that Californians would receive the potential benefits that would compensate for the downside of increasing marijuana usage throughout the state.”
Nison argues that competition in the market will force counties to establish taxation and regulation of marijuana. He pointed to the fact that eight or nine cities already have a recreational tax for marijuana on the ballot in the event of Proposition 19 passing.
“If the city right next to L.A. decides to start regulating cannabis and sell it, all of the L.A. residents are going to be going to that city [to purchase marijuana],” he said. “It is going to force L.A. to regulate it.”
Still, Salazar said, all the speculation about the economic boon and legislative implementations is just that: speculation.
“The thing that is clear is that nobody knows what is going to happen,” he said. “The only certainty is uncertainty.”
Humboldt native Green has spent hours talking about the proposition with fellow growers, dealers and economics students. He said everyone has the right to smoke, but he knows that legalization will hurt his bottom line.
So on Election Day, Green won’t take a side on the Prop 19 debate. It will be just another Tuesday for him — on the phone, brokering deals and checking on his properties — while 17 million Californians vote upon whether or not to forever alter the face of his business.
* Name has been changed