Not a day goes by without the news buzzing about the fortunes to be made in the newly legitimized cannabis industry. Canadian giants have been entering into multibillion-dollar mergers, with the same thing beginning to happen in California. While few would argue that more industry, more jobs and more money are bad things, an issue of equal, if not greater, significance is not getting the attention that it richly deserves: the positive impact that legal cannabis will have on our environment.
The cultivation and sale of marijuana — already a well-established, multibillion-dollar, black market industry — now is being thrust into the realm of legitimacy virtually overnight by way of massive statutory and regulatory undertakings. Fortunately, there are converging forces from the federal government, California regulators and the newly licensed cannabis businesses that will operate to curtail black market criminal activities and promote an evolutionary future of regulated industries obligated to minimize the negative impacts on the environment and to rectify the historic harm already done.
California’s Emerald Triangle, comprised of portions of Mendocino, Humboldt and Trinity counties, produces some of the most highly regarded cannabis in the world. The region has been estimated to grow approximately 70% of the domestic U.S. cannabis. The notable quality is attributed to unique soil and micro-climates. The Emerald Triangle is to marijuana what the Napa Valley is to wine, and it includes some of the most amazing wilderness in the United States: from mountains like the Trinity Alps to hundreds of miles of Pacific Ocean coastline, pristine Old Growth forests with Redwoods and Sequoias support abundant wildlife, and spectacular watersheds with world-class rivers, such as the Klamath, Mad, Trinity and Eel, together with abundant streams and creeks, provide critical habitat for salmon, steelhead and trout, as well as rare, threatened and endangered species.
Cannabis has been a part of the Emerald Triangle economy for more than half a century. Many of the early farmers worked hard to be responsible stewards of the environment and strived to achieve organic long-term sustainability without chemicals or pesticides. However, beginning in the 1980s, and increasing exponentially through the present, criminal drug cartels have squatted and trespassed on both public and private lands in the remote regions and destroyed the native countryside by clearcutting forested areas, building roads and obliterating natural habitats to create their cannabis plantations. The illegal activities included building dams, diverting or draining streams and creeks with devastating impacts for fish and wildlife during drought years, contaminating the land and water with chemical fertilizers, pesticides, petroleum products, human waste and the mud, silt and other detritus caused by the illegal construction and agricultural activities. Those activities caused more harm to the environment than commercial logging.
Now that both medical and recreational marijuana have been legalized in California, opportunities exist to shut down the black market, to remediate the past environmental damages and to minimize the future environmental impacts of the industry. Comprehensive licensing requirements are being implemented that cover every aspect of the industry from germination, cultivation, product testing, distribution, transportation, retail sales and waste disposal. The regulatory oversight specifically includes the expansion of virtually every existing California environmental law to cover the air, water and soil impacts of the cannabis business in the same fashion as every other regulated entity. From the California Environmental Quality Act for the development of facilities, to the storage, treatment and disposal of both non-hazardous and hazardous waste, newly licensed legitimate cannabis businesses will be on equal footing and a level playing field with all of the other regulated communities. Multi-agency task forces that include the Department of Food and Agriculture, the State Water Resources Control Board , the Regional Water Quality Control Boards and the Department of Fish and Wildlife have imposed operating conditions of compliance that address: site development and maintenance; erosion control and drainage features; stream crossing installation and maintenance ; riparian and wetland protection and management; soil disposal; water storage and use; irrigation runoff; fertilizers and soil; pesticides and herbicides; petroleum products and other chemicals; cultivation-related wastes; and cleanup , restoration, and mitigation.
Ahead of the power curve, and consistent with the various regulatory mandates, in 2015, the Regional Water Quality Control Boards for the North Coast Region, which includes the Emerald Triangle, and the Central Valley Region, issued general orders pursuant to the Water Code that, with minor exceptions, applied to any person engaged in cultivating cannabis on private land. Following the model of the Regional Board orders, and pursuant to the statutory directive of Water Code section 13149, on October 17, 2017, the State Water Resources Control Board, in conjunction with the Department of Fish and Wildlife, adopted a comprehensive “Cannabis Cultivation Policy” with principles and guidelines for cannabis cultivation that are applicable statewide. Contemporaneously, the State Water Resources Control Board issued an order with general waste discharge requirements governing all cannabis cultivation throughout California. The cultivators who already are enrolled under and governed by either of the 2015 Regional Board orders have until July 1, 2019 to enroll in regulatory coverage under the state order. Significantly, enrollment and compliance with the state order is a prerequisite to obtaining the Department of Food and Agriculture cultivator’s license.
Based upon the risks posed by the site conditions, the State Order imposes comprehensive technical monitoring and certification reporting requirements, under penalty of perjury, all of which are designed to confirm compliance with the state order. The state order provides notice that the agencies will conduct periodic inspections and informs the cultivator that the regulators participate in environmental crimes and other multi-agency state and federal task forces. As part of those activities, the cultivator is informed that information regarding their operations may be gathered via aerial surveillance, satellite imagery and complaints from the public or law enforcement agencies.
As such, after a person voluntarily submits to compliance with the state order, they become subject to regulation by, and enforcement of, the entire panoply of laws designed to protect the environment. By way of example, those laws include basic nuisance violations under Water Code § 13050, criminal and civil liability, with fines up to $25,000 per day, under Water Code § 13265, and the provisions of Fish & Game Code §§ 5650 and 5650.1, which impose strict criminal liability and provide for civil penalties of $25,000 per day for depositing any substance that is deleterious to fish, plant life, mammals or birds in waters of the state or in any place where it can pass into waters of the state. See, People v. Chevron, 143 Cal. App. 3d 50 (1983). The costs of cleanup and remediation of any such violations also may be imposed. Fish & Game Code §§ 5655, 12015. In the event that violations of the hazardous waste laws occur, the daily fines can range from $5,000 to $250,000, and felony convictions can be obtained based upon an ordinary negligence, “new or reasonably should have known” standard. Health & Safety Code § 25189.5; People v. Martin, 211 Cal. App. 3d 699 (1989).
In addition to administrative, civil and criminal regulatory enforcement by the government, the cannabis cultivator potentially also will be subject to private, third-party “bounty hunting” actions under the Proposition 65 discharge restrictions and warning /notice requirements. Further, the Plaintiffs’ Bar already is promoting MCLE (mandatory continued learning) programs focused upon how to master a variety of civil claims against the cannabis industries.
Thus, there are some very powerful deterrents against failing to be a good environmental citizen with the lawful cannabis cultivation operation. Fortunately, the model set by the responsible original family farmers mentioned in the second paragraph seems to be the guide for the brave and informed ones who respect the environment and were willing to sign up and work toward sustainability and moving the industry green with organic farming, solar power and water conservation.
So, one might ask, why bother with regulatory compliance? Why not just remain illegal, stay under the radar and continue to deal on the black market like the good ol’ days? The answer is, in a nutshell, because now that recreational cannabis is legal and only a limited number of duly licensed participants will be authorized the conduct business in the lucrative and growing market, the good ol’ days soon will end.
Here is why the black market cartel days will be minimized. First of all, McGregor Scott, the new U.S. attorney for the Eastern District of California, which includes the Emerald Triangle, recently announced that the federal government will be focusing its enforcement resources on attacking the black market by shutting down the illegal grows on federal land and targeting the marijuana cartels and interstate trafficking. Recently, the federal government allocated $2.5 million to the U.S. Forest Service to eradicate the illegal grows; significantly, 90% of that money has been earmarked for California.
Next, under state law now, a person only can legally engage in the cannabis market if properly licensed to do so under all of the operative state and local laws. Pursuant to the enrollment, registration, mapping, monitoring and certification provisions of the state order, the state now will be able to readily determine which operations are legitimate and which are not. The same holds true for all of the other material components of the industry like testing, distribution and retail sales all of which are regulated by the permitting requirements of the Bureau of Cannabis Control and local municipalities. By legalizing and regulating the industry, the government now has more comprehensive information as a tool to discover and ferret out illegal actors.
Finally, the most potent and effective force that will contribute to minimizing the impacts of the black market are the legitimate cannabis businesses themselves. While in the past they all were renegades and outlaws, that no longer is the case. There now are two significantly distinct classes: the exclusive legitimate, and the black market illegitimate. In order to secure returns on their substantial investments and to survive under all of the regulatory obligations that they have undertaken, like taxes, permit fees, compliance monitoring and reporting costs, why would the now legitimate entities suffer in silence for a minute while black market competition steals food from their tables? The answer simply is that they will not remain quiet because if they do, they will not be able to survive. So, we reasonably can expect that the legitimate participants in the cannabis industry now will assist the regulators and law enforcement in weeding out the illegal competitors attempting to continue with their black market activities.
Accordingly, by legalizing and regulating recreational cannabis, the environmental decimation of the natural resources of regions like the Emerald Triangle will be mitigated, and over time, the significant harm already done may be remedied with the environment restored to a condition approximating its spectacular native state.
Michael Vacchio is senior counsel at ADLI Law Group. His areas of practice include complex business and commercial litigation, environmental matters (administrative/civil/criminal), real estate and construction as well as internal corporate investigations and “white-collar” criminal defense. He can be contacted at firstname.lastname@example.org