Giant California greenhouse signals a big bet on cannabis legalization

From the article:

Graham Farrar has placed the bet here. He is the president and co-founder of Glass House Farms, and the company’s greenhouse offers 5 million square feet of indoor space for cannabis production. That comes to just over 114 acres, the equivalent of about 86 football fields.

Farrar, a garrulous proselytizer on behalf of cannabis and his company, said it is the second-largest greenhouse complex in the United States and the single largest dedicated to cannabis. What is harvested from these temperature-controlled cathedrals to weed is not necessarily meant to remain here in Farrar’s business plans.

[...]

The lack of uniform [California] state regulations, governing how much cannabis can be cultivated and how many businesses should be licensed to sell it, has produced winners and losers among the state’s roughly 8,000 licensed growers. The state government, meanwhile, collects more than $1 billion annually in cannabis tax revenue from a roughly $5 billion industry.

Small growers have taken a beating. Without access to bank loans, many have been unable to afford the multiple levels of taxes and permitting required to become legal or to weather a severe recent supply glut in the western marijuana market.

Even more growers never bothered to come into the light. An estimated two-thirds of California’s cannabis market — by far the nation’s largest — is still black market.

The winners include big growers like Glass House, which also owns two smaller cannabis greenhouses north of here in Carpinteria and, in all, produces about 300,000 pounds of cannabis for sale annually.

[...]

California and 20 other states, plus the District of Columbia, have legalized cannabis for adult recreational use, even though the federal government still considers it a drug on par with heroin and fentanyl.

This two-tier legal landscape has required a willing suspension of disbelief from the Biden administration and its predecessors, an I-don’t-really-see-you pretension that Farrar and other cannabis entrepreneurs predict will soon give way.

Last year, the California legislature passed a bill to allow licensed California cannabis businesses to sell their products in other cannabis-legal states. Gov. Gavin Newsom (D), who signed the bill, would negotiate the terms of trade with his counterparts.

[...]

Farrar and his partners had to take Glass House public on a Canadian exchange to raise the $92 million he needed to buy this greenhouse, a sale he completed in the fall of 2021. (A retrofit of the buildings took the overall cost to about $125 million.)

But Farrar had another problem: Ventura County, where this greenhouse sits, did not allow cannabis cultivation at the time he set his sights on the greenhouse. So he and his partners worked to place a measure on the county’s 2020 ballot to allow cannabis cultivation. Voters passed it easily.