San Francisco, USA (VIAnews) – So do you want to be a trailblazer farmer in the medical cannabis field? Be prepared to be self-reliant when it comes to financials and insurance in the case things don’t go as planned. The recent fires in Northern California showed that it’s risky to invest in a crop that is legal in seven states and allowed for medical use in 29 states but still classified as a Schedule I drug by the federal government – the same group as cocaine, heroin and LSD.
At least 34 marijuana farms burned down last month, and most farms lack insurance and will not qualify for federal aid, the Washington Post reported. The losses will be “especially severe this year because many growers had spent their life savings getting local permits and preparing crops for state licensure and sales scheduled to begin Jan. 2,” Hezekiah Allen, executive director of the California Growers Association, explained to The Los Angeles Times.
Marijuana is legal for medical use since 1996 in California. In the 2016 elections, a referendum legalized its recreational use in the State as well, to begin in 2018. According to CNN, the state generated $2.8 billion in revenue from medical marijuana sales in 2016. Once legal sales begin, that market is projected to grow to more than $5 billion.
But even with all that money on the table, federal law does not allow cannabis growers to have insurance, what can translate into million-dollar losses. Farmers usually “invest upward of $5 million in their facilities and as much as $3 million on growing the crop itself,” CNN reported.
Even online fundraising fell through when Mr. Allen used the personal crowdfunding site YouCaring in order to gather donations to help families and farms hit by the fire. He set a goal of $25,000 and had managed to raise over $13,000 before the site canceled the fundraiser and proceeded to refund donations.
“Our payment providers are unable to process payments connected to the production or sale of cannabis (including CBD oil), even in situations where such payments would be permitted under State Law,” said YouCaring’s Camelia Gendreau in a statement. Since it’s still illegal federally, processing payments related to marijuana can be considered money laundering, CNN reported.
But while YouCaring did not allow such fundraising, other crowdfunding sites are full of medical marijuana-related campaigns, proving that even when it comes down to web campaigns, dealing with cannabis is still a big grey area. A search for the words “medical marijuana” in GoFundMe generates thousands of results in available campaigns across the country. Fundly also has over a hundred marijuana-related campaigns.
Such blurred lines in the regulations of growing medical marijuana, and the years of secrecy in the trade prior to statewide legalization has led many growers to resort to rather traditional – and risky – means of keeping their profits and savings: burying boxes of gold and silver in their properties.
But the laws of the market may come to the rescue for the California farmers that managed to keep some plants. The prices could go higher due to the sudden drop in the amount of marijuana available in the market. The spike in the price will coincide with higher demand due to the upcoming legalization of recreational marijuana sale in California on January 2nd, 2018.