By
Kim Chipman
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May 8, 2023 at 4:00 AM PDT
We’ve reported on how California’s illicit pot market has hurt the heavily taxed and regulated legal market. Expanding on that, agriculture reporter Kim Chipman this week follows up on her earlier reporting about water theft in California (see here) to look at how the industry is contributing to the state’s shortages.
Running dry
California’s stubbornly persistent illegal cannabis industry isn’t just undercutting the legal market — it’s also behind some of the world’s most blatant water theft.
The state’s estimated $8 billion underground marijuana industry consumes staggering volumes of the precious resource, despite the state legalizing recreational use back in 2016. Some participants have been known to truck in stolen water, while others take it from fire hydrants or dig illegal wells. Years of off-and-on droughts in the state have exacerbated the problem.
“The amount of water stolen by the illegal cannabis industry is mind-blowing,” said John Nores, a retired lieutenant and former team leader of the California Department of Fish and Wildlife Marijuana Enforcement Team. “We are talking millions and millions of gallons taken annually by these unlawful operations.”
An average cannabis plant requires as much as 5 gallons of water a day and takes anywhere from 90 to 275 days to grow, according to Nores. With some illegal operations housing on average 2,000 to 5,000 plants, “that’s a number with a whole lot of zeros,” he said.
It’s not just California seeing criminals profit from water theft. Similar actions have also decimated national-park lagoons in Spain and threatened to bankrupt farmers in Chile. Illegal water theft has even ensnared a former mayor in Brazil.
In California’s northern Siskiyou County, where there’s been a longtime heavy presence of illegal marijuana growing and drought conditions are among the worst in the state, Nores said he’s seen drilling of wells without permits and other obvious water theft. That’s making it even tougher on hay farmers and beef cattle ranchers, many of whom have had to sell off assets or go out of business altogether, said Ryan Walker, a rancher and president of the Siskiyou County Farm Bureau.
“We have alfalfa fields that are bone-dry but illegal marijuana grows are getting water and making harvest,” Walker said in an interview late last year. “Hundreds of water trucks are lining up to transport water to these illegal grows, many times right across street from agriculture facing unprecedented curtailments and new groundwater restrictions.”
Walker added that, even as excessive rains this year have eased drought conditions in the state, water curtailment worries remain in his region. “We are still definitely under water cuts this year,” he said.
The problem has also been identified in Nevada County, located north of Lake Tahoe.
In 2021, at the height of the cannabis water theft crisis, officials estimated an annual loss of as much as 4,000 acre-feet of water amid reports of supplies being hauled in or groundwater being illegally pumped from the basin, according to Mojave Water Agency General Manager Adnan Anabtawi. An acre-foot is about 326,000 gallons, enough water to submerge an American football field 1 foot deep.
California communities have made progress in addressing water theft and the situation has improved recently, according to those who are tracking the efforts. But it’s a problem that the state is going to continue to struggle with — and has the potential to put the industry at loggerheads with the other crops and industries competing for the state’s limited water resources.
“Water theft is an issue regardless of water levels,” Nores said. “Drought or no drought, water is being depleted not just in California but across the globe.”
Number of the week
85%The percentage of cannabis consumers in legal states who say they definitely or probably will continue consuming marijuana in the next six months, according to BDSA’s latest report on consumer tendencies.
Quote of the week
“It is clear that my actions have become a distraction from the important and critical work of the secretary of state’s office.” — Shemia Fagan Former Oregon secretary of state Fagan resigned last week after being criticized for moonlighting as a consultant for a cannabis business.
What you need to know
Cannabis stocks jumped on May 4 and 5 on news of a congressional hearing on a bipartisan cannabis reform bill.
Young men who use potent marijuana frequently have an increased risk of developing schizophrenia, according to a new study of almost 7 million health records.
California regulators have created a team to investigate labor exploitation in the state’s marijuana industry, the Los Angeles Times reported.
More dogs are eating discarded cannabis products, prompting alarm among veterinarians and pet owners, the Associated Press reports.
The Maryland governor signed a law imposing a sales tax of 9% on adult-use cannabis.
The self-proclaimed “Largest Cannabis Company in the US” can’t register trademarks for empty oil dispensers because they’re primarily intended to be sold as drug paraphernalia, a trademark tribunal said last week.
Canopy Growth’s price target was cut to $1 from $2 at Piper Sandler.
The Washington Post posted a story about whether cannabis helps with anxiety — or generates more of it.
The Post also reported on how changes in cannabis have altered the calculus for parents of teens.
Wellness startup Love, the latest company co-founded by Silicon Valley’s favorite provocateur, Ryan Breslow, is open for business. On offer: tongue cleaners, productivity gummies and herbal pills for menopause symptoms.
Events
Monday 5/8
Innovative Industrial Properties reports earnings after the markets close.
Tuesday 5/9
22nd Century Group reports earnings before the markets open.
Cronos group reports earnings before the markets open.
GrowGeneration reports earnings after the markets close.
Ascend Wellness reports earnings after the markets close.
Wednesday 5/10
Verano Holdings reports earnings before the markets open.
Trulieve reports earnings before the markets open.
Thursday 5/11
The Senate Committee on Banking, Housing and Urban Affairs conducts a hearing on cannabis banking challenges.
TerrAscend reports earnings after the markets close.
Friday 5/12
Charlotte’s Web reports earnings before markets open.
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