'Crisis mode': Failing pot farms are killing this California town’s economy

Not long ago, Garberville could have held the title of California’s busiest town without a stoplight. Thousands of tourists filled this small town’s restaurants and bars after spending the day craning their necks at the towering redwood trees of the nearby Avenue of the Giants. And hundreds of cannabis farms in the surrounding hills of Humboldt County brought millions of dollars to the local economy. 

But today, the town is on life support. California’s cannabis legalization has killed many of those pot farms, leaving empty storefronts and a cratered Garberville economy in its wake. Overproduction has dropped the wholesale price of cannabis in California by as much as 95%. That’s made pot cheaper for consumers, but it’s also made it impossible for many farms to stay alive. 

“The economy here has crashed,” said Laura Lasseter, the director of operations for the Southern Humboldt Business and Visitors Bureau. “… The economy in Southern Humboldt is in crisis mode, and 90% of that crisis mode is because of the cannabis industry.”

Garberville is the most obvious sign of an economic collapse that is reverberating across the surrounding “Emerald Triangle,” a three-county region that includes Humboldt, Mendocino and Trinity counties. For decades, this area was the cannabis-growing capital of the entire country, but now the pot farms are going out of business and bringing down the local economy with them.

County Supervisor Michelle Bushnell, who represents Garberville, said sales tax collections are down and storefronts across the town are empty. She has lived in the town since the 1970s and said she has never seen the local economy so depressed.


“I have been here my whole life, and I don’t know that I’ve ever seen it this bad,” Bushnell told SFGATE. “… I would really love to say, hang on and try, and things will get better. But I’ve been saying that for a year. I said a year ago that in a year we’ll be through this, but it’s been a year now, and it’s not any better. In fact, it’s worse.”

Cannabis is trimmed at Huckleberry Hill Farms, located just beyond Garberville in Southern Humboldt County.

Cannabis is trimmed at Huckleberry Hill Farms, located just beyond Garberville in Southern Humboldt County.

Courtesy of Huckleberry Hill Farms

Meghan Joyce, the general manager of the local Chautauqua Natural Foods grocery store, said the business was down 12% last year, and the store is debating reducing its hours.

“We relied on so many cannabis farmers and people in the cannabis industry to keep our storefronts full and business in town,” Joyce told SFGATE. “It’s hard to see where we are going to get that from.”

The New Yorker once described Garberville as having the “rough edges of a gold-rush town, but with peace flags and hemp lattes.” Now the gold has left town, leaving rough edges and no one who can afford a hemp latte.

‘Nobody is making any money’

The first wave of cannabis growers came to Garberville and the greater Emerald Triangle in the 1960s and 1970s, when people following the “back to the land” movement took advantage of the region’s affordable real estate to build their own farms. The cool nights, consistent sun and plentiful water of California’s North Coast Ranges made it an ideal environment to grow cannabis. Pot quickly became a revenue source for many of these early homesteaders. 

In the 1980s, the federal government waged a brutal war against illicit cannabis farming in the Emerald Triangle, yet the industry continued to grow larger. And then California legalized medical marijuana in 1996, creating a green rush of new cannabis farms. Soon, Humboldt’s farms were sending cannabis to dispensaries across the state and even feeding the entire country’s illicit market. By some estimates, the Emerald Triangle grew 60% of the pot in the entire United States.

A cannabis plant grows at a pot farm in Humboldt County.

A cannabis plant grows at a pot farm in Humboldt County.

The Washington Post/The Washington Post via Getty Im

But the same things that made Southern Humboldt County one of the country’s best places to grow pot before legalization are now working against it. After voters legalized recreational cannabis in 2016, the region’s dense forests and long winding dirt roads, which were good for evading law enforcement, became costly expenses when it came to running a legal business.

Wendy Kornberg, the owner of Sunnabis, a small cannabis farm 20 minutes down a dirt road from Garberville, said all of the surrounding pot farmers either have given up or are on the verge of bankruptcy. “Everyone is struggling. We all had to raid our kids’ college funds,” she told SFGATE. She said these farm failures have drained the town’s economy. 

“I grew up in Garberville, from 1977 till I graduated high school in 1995, and I have never seen so many empty storefronts. The whole side of one of the streets is just empty storefronts. It’s a little bit terrifying when you look at it from that viewpoint,” she said.

Lasseter, of the visitors bureau, estimated that Humboldt County is on track to lose 50% to 70% of its cannabis farms. She said the biggest problem for the region’s farmers has been the state government’s allowance of massive pot farms. Originally, California voters approved a legalization plan that limited cannabis farms to only 1 acre for the first five years of legalization. But in 2017, the state created a loophole for companies to infinitely “stack” smaller licenses so they could expand their pot farms to more than a million square feet.

Cannabis is trimmed at a pot farm in Garberville, Calif. 

Cannabis is trimmed at a pot farm in Garberville, Calif. 

Marcos Borsatto / EyeEm/Getty Images/EyeEm

The state’s expensive regulations have added even more costs to farming cannabis, which many small farmers are unable to afford. Joshua Sweet, who owns multiple Garberville buildings as well as two pot farms, blamed the cannabis industry’s crash on overregulation. He is currently being sued by the state over an irrigation pond that the state says was built illegally.

“Before regulation, left to its own devices, this community was safe [and] vibrant socially, culturally and economically. Within five years of regulation, it has completely collapsed,” he told SFGATE. “Nobody is making any money.”

‘It’s trickling down to everyone’

Bushnell, the county supervisor, admitted that the county government could have done more to support the local cannabis industry.

“Could we have done better? Yes. Could the state have done better? Absolutely,” Bushnell told SFGATE. 

One of the county’s more controversial actions was placing a cultivation tax on legal farms in 2017 that charged farmers based on their square footage, not the amount of pot that they actually sold. This added tens of thousands of dollars in costs to the small farms. Eventually, the county cut the tax rate by 85% and then suspended the tax entirely last November.

Kornberg, the cannabis farmer, said she always opposed the cultivation tax but still defended the county’s work in helping get pot farms approved.

“People want to blame someone, and it’s easy to blame your local representatives, but Humboldt did some amazing things to help us set up an easier track towards legalization,” Kornberg said.

Sequoyah Hudson, a farm owner and the CEO of Humboldt Sun Growers Guild, said business owners and many of the county’s political leaders never appreciated the cannabis industry, even as it was feeding millions of dollars into the local economy.

“[It was] absolutely taken for granted,” Hudson said. “It was such a supporter of our local economy in the background and behind closed doors. The people who were naysayers of the cannabis industry just weren’t aware of it.”

Redwood trees are seen in Richardson Grove State Park on Aug. 12, 2013, in Garberville, Calif. As the local cannabis industry declines, some are hoping the area's natural beauty can draw tourists to boost the economy.

Redwood trees are seen in Richardson Grove State Park on Aug. 12, 2013, in Garberville, Calif. As the local cannabis industry declines, some are hoping the area’s natural beauty can draw tourists to boost the economy.

Ian C. Bates/The Chronicle

Mary Halstead, the owner of the Paper Mill, a stationary and art supply store in Garberville, said her business is down 40%. She agreed that the local economy was dominated by cannabis.

“Everybody either worked for a farmer, were a farmer or trimmed seasonally. That’s all anybody did around here,” Halstead told SFGATE. “My husband does tree work, and even he has very little work now because nobody has any money to hire him to do tree work. It’s trickling down to everyone, to every local business.”

Leaders in the town have largely given up on the idea that the cannabis industry will ever return to its pre-legalization scale. Instead, they’re trying to bring more tourists to the town. Lasseter said Garberville’s best hope of an economic rebound is to bring more tourism to the area’s natural beauty.

“What we’re working on is trying to stay in the positive and educate the community on how to transition to tourism. Mother Nature isn’t making another Avenue of the Giants or Lost Coast. That’s here, and the fall of cannabis can’t take that away,” Lasseter said.