A conversation I’ve had more than a few times in Calaveras County involves the question of whether folks here want economic growth. The speaker is invariably a person who says he or she is in favor of growth and who equates growth with prosperity. Such prosperity, in this view, would result in young families moving to the area, homes being built, new businesses launched and rising real estate values.
For those of us who already own real estate in Calaveras County, this vision is attractive. It is also attractive for those who are unemployed, including people who would make careers teaching the offspring of the young families or locking up the wrongdoers who refuse to contribute to peace and prosperity.
No one, really, ever says that they oppose this vision. Yet I have repeatedly heard people tell me that there is some kind of powerful group that is able to block economic growth. I’ve heard that these anti-growth folks are crusty old ranchers who don’t want the towns to expand and foster a rival political base, or that the anti-growthers are radical environmentalists who want the human population reduced.
It is true that people fight with each other for control of resources. But I haven’t seen much evidence that anyone can do much to slow or speed the pace at which resources are consumed and economies grow.
Decades ago, it was possible to make money by building retirement homes for people leaving the overheated San Francisco Bay Area real estate market. So we did. And before that, it was possible to work in mills processing timber or packaging cement. So we did. And long before that, it was once possible to work in mines producing gold and silver.
Yet all of those past booms hit their peaks and declined without much regard to whether anyone was in favor of those booms. And now that the easiest gold is mined, the best old-growth trees cut and the wealthiest generations of retirees settled, we aren’t going to get them back.
So it’s interesting to see how we are reacting to the current marijuana boom.
Just to give perspective, one conservative estimate for the scope of the medical marijuana industry in Calaveras County is that it has a value of more than $100 million a year. That figure is derived from an estimate of the potential for medical marijuana taxation in the county given by Caslin Tomaszewski, the president of the Calaveras Cannabis Alliance, an industry group.
Nonmarijuana agricultural products such as wine grapes, timber and cattle, in contrast, were worth less than $27 million in 2014, according to the Calaveras County Agricultural Commissioner.
This past week, the California Secretary of State approved signature gathering to begin on a ballot initiative that would seek to ban all private marijuana cultivation in California and replace it with a state government-run growing operation. If backers get the required 365,880 signatures to get it on the ballot and then get the measure approved by the voters, Calaveras County’s medical marijuana industry could disappear.
This outcome seems unlikely. Industries don’t disappear based on what we think we want or based on the laws we pass. Look at what happened with the alcohol industry during Prohibition. What seems much more likely is that the marijuana industry will run its course just as mining, logging and housing did before. The industry will boom as long as growers can find sufficiently cheap land and they have markets to take the supply. As baby boomers get older and sicker, demand for marijuana appears likely to grow.
Arcview Market Research, a marijuana industry research firm based in Oakland, estimates that the legal marijuana market nationwide in the U.S. hit $2.7 billion in 2014, about half of that in California. Five years from now, the total could be as much as $36.8 billion if there is nationwide legalization of marijuana use by adults, according to Arcview. If that happens, then marijuana would become a bigger market than organic food, according to Arcview.
In my view, economic activity is somewhat like the weather. We get real estate booms or marijuana booms when conditions are right. The same for droughts, fires and floods. It doesn’t matter much whether we are in favor of the weather or against it.
What does matter is how we manage economic reality. In that, it is like managing weather. Sometimes we get rain. We need rain gutters. If we are having a marijuana boom, then we need the equivalent of rain gutters: reasonable regulations to mitigate the impacts. At the least, it seems that we ought to have a zoning code to prevent damage to the interests of neighbors and regulatory fees to cover the costs to local government of providing services to the farms.
Contact Dana M. Nichols at email@example.com.