So you want to grow in California?

Environmental law will impact recreational cannabis cultivators in the Golden State

When Californians approved Proposition 64 to legalize the cultivation, distribution, manufacture, testing, sale and use of recreational marijuana, they brought with it an industry that is expected to grow exponentially. But rapid and extensive expansion of outdoor cultivation is likely to significantly impact water supply, water quality, fish, wildlife and related habitat. High-intensity lights used for indoor cultivation will add a sizeable carbon footprint. State and local agencies charged with enforcing environmental laws have already documented these impacts.

Under Prop 64, also known as the Adult Use of Marijuana Act (AUMA), growers will soon be able to apply for a cultivation license from the California Department of Food and Agriculture. The AUMA requires applicants to comply with environmental laws as a condition of both obtaining and maintaining a license. The license will include conditions required by the Department of Fish and Wildlife (DFW) and State Water Resources Control Board (SWRCB) to ensure that individual and cumulative effects of cultivation activities do not negatively affect natural resources, such as instream flows needed for fish spawning and migration.

Although the AUMA adds additional layers of environmental regulation to cultivation activities, licensees need to comply with a myriad of existing federal and California environmental laws that apply to cultivation. In most circumstances, a potential licensee will need to obtain permits from various oversight agencies in order to obtain a license under the AUMA. Applicants also must be cognizant of regulations — or even prohibitions — imposed at the city or county level.

Under the AUMA, cities or counties may add additional regulations, fees or taxes on recreational marijuana cultivation. Local jurisdictions may even prohibit such operations, notwithstanding state licensing approvals.

Therefore, potential licensees should (a) determine whether cultivation is allowed in the local jurisdiction and obtain necessary local approvals, (b) assess the likely environmental impacts associated with the cultivation operation, (c) become familiar with the environmental laws designed to prevent or reduce such impacts, and (d) move forward with the procedures required for obtaining a cultivation license.

The following information serves as a non-exhaustive checklist to identify some primary environmental impacts and applicable laws relating to cultivation, the respective governmental oversight agencies and initial steps a potential licensee should take toward compliance.

Water Use and Supply

Primary Environmental Impacts: The water supply that is necessary to support instream flows, fisheries, wildlife, and other beneficial uses is dependent on sources of water that might be diverted for marijuana cultivation. Water diversions can also interfere with downstream senior water right holders.

 

Oversight Agency: Division of Water Rights, SWRCB

 

Applicable Laws: California Water Code (primarily Divisions 1 and 2); decisional law of

California courts; precedential orders and policies adopted by the SWRCB; and the California Environmental Quality Act. The AUMA requires applicants to identify the sources of water that will be used for cultivation, including a certification that the applicant has a legal right to use the identified water under state law.

 

Initial Steps Toward Compliance: Determine whether the cultivation operation has a water right. If it does not, obtain a water right permit to divert water from a surface water body. A water right is legal permission to use a reasonable amount of water for a beneficial purpose. Property that touches a river, stream or other body of water is not automatically vested with a water right. In the absence of a water right, a water right permit must be obtained in order to divert water. The SWRCB grants new water right permits only when there is a reasonable likelihood that water is available, and that use of the water will not harm natural resources or deprive anyone who has a higher priority water right.

Water Quality

Primary Environmental Impacts: Impaired water quality caused by polluted runoff (mobilized from either irrigation or storm water runoff) from the over-application of fertilizers, pesticides and other toxic substances; water diversion; erosion and sediment from poor land management practices; spills from chemicals or petroleum products stored on the property; and any other trash and domestic waste.

 

Oversight Agencies: Regional Water Quality Control Boards, SWRCB, the U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency

 

Applicable Laws: Porter-Cologne Water Quality Control Act, federal Clean Water Act

 

Initial Steps Toward Compliance: Obtain a state permit (waste discharge requirements) or a conditional waiver from the applicable regional board relating to the discharge of waste and follow best management practices. A federal storm water permit may also be required. Currently, only the North Coast Regional Board (Region 1) and the Central Valley Regional Board (Region 5) have adopted orders regulating discharges from cultivation activities. An applicant will also need to obtain a separate permit from the U.S. Army Corps of Engineers if the applicant plans to dredge or fill wetlands that are deemed to be “waters of the United States.”

Fish, Wildlife and Habitat

Primary Environmental Impacts: The clearing of land for development, water pollution and the reduction or alteration of stream flows caused by diverting water can destroy habitat and harm or kill fish and wildlife.

 

Oversight Agencies: U.S. Fish and Wildlife Service, DFW, California Department of Forestry and Fire Protection (CalFIRE)

 

Applicable Laws: Federal Endangered Species Act, California Endangered Species Act, Forest Practice Act, California Environmental Quality Act

 

Initial Steps Toward Compliance: Consult with DFW to determine if the cultivation activity is likely to adversely affect a threatened or endangered species or their respective habitats. Moreover, if a federal permit or approval is otherwise required (for example, a wetlands permit under Section 404 of the Clean Water Act), any action that “may affect” a federally protected species or habitat will require a “consultation” under the federal Endangered Species Act. If necessary, apply for an incidental take permit and prepare a habitat conservation plan (if the species is on the federal list). Separately, contact DFW to determine whether a Lake or Streambed Alteration agreement is required to ensure that any construction activity occurring in a streambed does not harm fish or wildlife. In addition, contact CalFIRE to apply for a Timberland Conversion Permit or related exemption if converting timberland to a non-timber growing use.

Pesticides

Generally: The use of pesticides or herbicides on marijuana has not yet been reviewed for safety, human health effects or environmental impacts. Under California law, the only pesticide products allowed for use on marijuana are those that contain an active ingredient that is (a) exempt from residue tolerance requirements and (b) either registered and labeled for a broad enough use to include use on marijuana, or exempt from federal registration requirements as a “minimum risk pesticide” under the federal Fungicide and Rodenticide Act.

Separately, the California Department of Pesticide Regulation, in consultation with the SWRCB and the Department of Food and Agriculture, will develop regulations to ensure that pesticide application from cultivation activities is consistent with standards under the Food and Agriculture Code.

Marijuana cultivation is similar to any other agricultural industry that potentially affects the environment — businesses must comply with federal, state and local environmental laws and regulations relating to water supply, water quality, fish, wildlife, habitat, pollution and overall carbon footprint, among others. Cultivators interested in obtaining licenses in California will greatly benefit from a strategic understanding of the regulatory landscape that lies ahead.

 

Sarah Quiter is a senior associate in the Oakland, California office of Meyers Nave. She provides environmental and municipal law counsel for public and private entities. Her knowledge of environmental law positions her to address the unique challenges facing California, such as the regulation of cannabis, particularly as applied to cultivation, and the drought. She can be reached at squiter@meyersnave.com.

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