Federal legality of grant program debated
October 5, 2022 \u2014 Members of the rapidly dwindling cannabis community showed up en masse at the Board of Supervisors meeting this week, to speak about the hardships of the market, the recommendations of the cannabis ad hoc committee, and a proposal to limit the cannabis equity grant program. Dozens of cannabis business people in yellow T-shirts waited in the hallway outside the Board of Supervisors chambers on Tuesday afternoon as the Board held an extended closed session that lasted until after 3:00 pm. \n\nMonique Ramirez, a farmer and policy advocate for the Mendocino Cannabis Alliance, had driven down from Covelo, a week before she was due to give birth to her second child.\n\u201cOur harvest is going wonderful, especially with the great weather we\u2019ve had,\u201d she said. \u201cThe market, that\u2019s a whole other story. Not doing so great.\u201d Other farmers who were spending a sunny fall day off the farm described offers of $350 and even $100 a pound for their product. Ramirez said she was still struggling to sell last year\u2019s product from her cottage farm, which is the smallest license type. \u201cFor us, $200-$300 a pound does not work when you\u2019re yielding maybe 80-100 pounds, max,\u201d she explained.\n\nRamirez told the Board that the reason she is such a staunch legal policy advocate is that she was raided years ago. She was harmed by the war on drugs, which makes her eligible for a cannabis equity grant. The much-delayed program was the subject of a Grand Jury report this year.\n\nThis week, Supervisor Ted Williams sponsored an item proposing that staff limit the program to \u201clegitimate government purposes,\u201d and to \u201cvoid any program elements found to be impermissible under federal law.\u201d The grant guidelines are set by the state. The item was not accompanied by explanatory materials, which was frustrating to some of the leading cannabis advocates in the room.\n\n Supervisor John Haschak didn\u2019t think the feds were much of a threat. \u201cWe\u2019ve been into this program for two years,\u201d he said. \u201cAnd so what is the concern right now? You know, I don\u2019t hear that the feds are coming. We can\u2019t even get the federal government to deal with the cartel growers in this county.\u201d\n\nIn a brief interview after the meeting, Supervisor Ted Williams, who sponsored the item, said that he has been asking County Counsel for a long time if the grant program is legal, or if it exposes the county to legal liability for violating federal laws about cannabis cultivation. \u201cIt appeared (on this week\u2019s agenda) because I finally got a different answer,\u201d he said. He was particularly worried that the state currently allows grant funds to be used to pay the start-up costs of cannabis businesses.\n\nCounty Counsel Christian Curtis insisted on getting majority board approval before he would answer the question of whether or not grant applications are in keeping with federal law. After a three-vote approval, with Dan Gjerde and Maureen Mulheren dissenting, he offered his opinion.\n\n\u201cWith respect to whether the activities that were to be funded by the grant program were compliant with federal law: no,\u201d he said. The activities that are to be funded are the cultivation of cannabis. Cultivation of cannabis remains unlawful under federal law. The review that my office conducted was for the purposes of determining whether or not the applications met the requirements of the grant program and state law. Those that went through, we did believe met those requirements and were consistent with the statute, the guidance put out by the state, et cetera. Whether the underlying grant program is consistent with federal law, I can\u2019t say that it is.\u201d\n \nBut Hannah Nelson, an attorney with thirty years\u2019 experience in cannabis and criminal law, offered a history lesson on the county\u2019s original permitting program, originally enacted in 2008, which sought to regulate cannabis cultivation locally, in contravention of federal law. \u201cThe feds came in and threatened to intervene with the county for starting a permitting program, and that\u2019s why that program shut down,\u201d she said. \u201cBut the specific reason was because at the time, that was under Prop 215, and the State of California basically only had the Attorney General\u2019s guidelines, which were pretty loosey-goosey. And the feds said, when California enacts a complete, robust regulatory system, we\u2019ll back off.\u201d In a memo to the Board, Nelson wrote that \u201ceach year since 2015, the federal budget was passed with a specific amendment that prohibited the feds from spending money on pursuing cases regarding medical cannabis (later expanded to recreational) if the activity was in conformance with state law where the activity was legal in that state.\u201d\n\nDuring the October 4 meeting, Nelson opined that the risk of running afoul of federal regulations is minimal at best, and that if county counsel thought differently, he should have addressed it long ago. \u201cThis is an issue without a problem,\u201d she declared, as farmers laughed and cheered. \u201cAnd it has been...