‘Times are really, really tough’: Plummeting cannabis prices strain small NorCal farmers
Humboldt County cannabis farmers are drowning in a flooded market. As the price of cannabis continues to fall, small farmers struggling to stay afloat fear for the sustainability of their future.
Jason Gellman, a second-generation cannabis farmer and owner of Ridgeline Farms in Southern Humboldt, has watched the cannabis industry evolve since he was a kid. He admitted that he has an advantage because his brand is well known throughout the region and much of the state. Even still, he said he’s struggling to sell his crop.
“Times are really, really tough for small farmers,” he said. “Most of us are in the red right now and if you are lucky enough to sell your product, it seems to be the average price per pound is around $700 which is way, way down. The county wants their money, the state wants their money, the banks want their money, the trimmers need to be paid and all of the other fees. For a small farmer, it costs around $500 to grow a pound. It’s barely paying the bills.”
In June, the wholesale price for cannabis from last year’s harvest dropped from around $1,200 a pound when the 2021 light deprivation or “dep” crop began to hit the market, according to Humboldt County Growers Alliance executive director Natalynne DeLapp.
“The wholesale price for 2021 deps is between $650 and $750 a pound,” she said. “The wholesale price for 2020 AAA grade flower is between $400 and $500 a pound, otherwise as low as $200 to $400 per pound. Some farmers are having their 2020 harvest returned from distributors because they are unable to sell it. This is after paying for trimming ($70 to $200 per pound), testing and paying state harvest taxes ($154 per pound).”
DeLapp attributed the dramatic fall in price to “massive overproduction” across the state.
“California farmers are producing four to five times more cannabis than our legal market can consume,” she said. “Simple supply and demand economics demonstrates when your supply outpaces your demand, the prices go down. The question of survivability is in question.”