Business

“Is It Worth It?”: California Wildfires Threaten Cannabis Growers from All Angles

By Dan Mitchell Aug 27, 2020
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Dan Mitchell is a veteran journalist based in Oakland, Calif. He has written for The New York Times, Fortune, Wired, National Public Radio, the San Francisco Chronicle, the Chicago Tribun...
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Dan Mitchell is a veteran journalist based in Oakland, Calif. He has written for The New York Times, Fortune, Wired, National Public Radio, the San Francisco Chronicle, the Chicago Tribune, Leafly, and many other publications.
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California’s increasingly hellish wildfires present an existential threat to northern California’s celebrated pot growers.  

“I personally would not invest in an outdoor California grow,” said Reggie Guardino, vice president of research and development at Front Range Biosciences in Lafayette, Colo.

Guardino knows what he’s talking about, having worked in California during previous fire seasons. As president and chief science officer for Steep Hill, a testing laboratory in Berkeley, Guardino led an the company’s examination  of weed grown in fire areas. The results weren’t encouraging.

In 2018, after 16 major wildfires hit the state, Steep Hill tested plants to see how they might have been affected. Guardino and his crew discovered traces of fire retardants and other chemicals, as well as remnants of smoke, ash, and soot.

Steep Hill’s business is to test plants to ensure they comply with California’s stringent requirements, but in this case, Guardino was simply curious. “We took it upon ourselves to do this,” he said. The amounts of the various man-made chemicals they found, such as fire retardants, were tiny, but “might be cause for some concern,” he said.

None of the stuff Steep Hill found  was on the state’s list of banned contaminants, but that doesn’t mean it was harmless. And even the harmless agents can change the nature, and possibly the effects, of the plant.  For instance, due to smoke from burning trees and other materials, “the terpene profiles change,” Guardino said.

A Multi-Pronged Problem

Before pot became legal for California adults in January 2018, worsening wildfires had already been wreaking havoc on the industry. The past few years have been worse than ever. The worst outcome is, of course, when buildings burn down  or crops are destroyed. But there are plenty of other, less obvious problems creating headaches for the industry. They include contaminated weed, the need to divert water from farms to firefighting and higher insurance costs.

In a vicious circle, the industry might be making things even worse: as climate change grows more severe, it sends more growers indoors, where they have more control over temperature and humidity. That, in turn, exacerbates greenhouse gas emissions as indoor growers tend to use a lot of fossil fuels, especially for lighting and HVAC systems.

If a weed farmer is considering an outdoor grow, “they have to ask themselves: is it worth it?” said George Sellu, an agriculture instructor at Santa Rosa Junior College and coordinator of the school’s agribusiness and hemp program. Prospective growers, or those looking to expand their operations, “might want to consider wildfires as they choose where to locate,” he said.

He noted that even being several miles from a wildfire can substantially impact a crop. “That’s why we don’t have a lot of large, outdoor growing operations up here,” north of San Francisco.

While, locating closer to populated areas might generally be less risky, if those areas catch fire, the effect on the plants can be much worse. For instance, the Tubbs Fire of 2017 burned big swaths of Santa Rosa, as well as parts of the cities of Napa and Sonoma and other dense areas. Many pot operations, including farms, were hit hard. “If you’re close to populated regions, that means buildings burning and cars burning,” sending a chemical stew into the air that falls on farms, Sellu said.

Opting to grow indoors is one alternative. Of course, indoor operations can burn down just like any other business,  But assuming that doesn’t happen, at least the plants will be safe from contamination, for the most part. Fire detritus — smoke, chemicals, ash, etc. — can still find its way inside, but it’s easier to protect plants, and they can be transferred to new soil or substrate, if need be.

Some cultivators and plant scientists advise choosing plants that are smaller and denser. “There’s less surface area,” Sellu noted. But this creates issues for growers who sell into the oils market, since bigger buds are more economical. Another option: choosing strains with shorter grow times, or those that don’t flower during the height of fire season. That’s a challenge because harvest time and the wildfire season run more-or-less concurrently.

Meanwhile, the fires are sending insurance rates through the roof. Matt Porter, a broker who specializes in cannabis insurance for Brown & Brown, says that while most cannabis businesses carry insurance for their buildings, only about half carry crop insurance. “Insuring outdoor grows is extremely expensive,” he said. “That’s true no matter what your wildfire risk is,” but of course the more risk you face, the more you have to shell out for coverage.

Also, most policies exclude damage from smoke and ash, though coverage for such damage can often be added to a policy — at greater cost. If, as many scientists expect, wildfires continue to grow in number and severity, many growers in susceptible areas might eventually be unable to get coverage at all, Porter said.

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Dan Mitchell
Business columnist