SPECIAL REPORT: Cannabis greenhouse boom in Monterey County

The Central Coast is seeing green as the cannabis industry attempts to leave the black market behind. Since Monterey County made it possible for medical marijuana growers to become legit, the market has been growing fast.

KION’s Paul Dudley has a special report as the Salinas Valley looks to be the perfect place for cultivators.

There is marijuana in the valley and it’s because the Central Coast offers the perfect climate for cultivation. Many growers are finding a home in greenhouses that for years have been abandoned.

In the heart of the Salinas Valley, River View Farms is getting a makeover.

“Just 8 months ago this was poinsettias and succulents,” said Ryan Miller with River View Farms.

It might be an old greenhouse, left over from the valley’s cut flower boom, but it’s a new age for cannabis cultivation.

“It’s great to be at the forefront of a new exciting venture. We are one of the fastest growing industries in the country and it’s something I firmly believe in,” Miller said.

When it comes to growing marijuana, the Central Coast could be the best place to do it.

“We are the Silicon Valley of ag. We have everything we need here. We have the most unique climate here of any place to grow,” River View Farms President Mike Hackett said.

After the passage of Measure Y in November, coupled with other recent policies, cultivation in Monterey County is trying to move out of the grey market. But only for indoor growing, abandoned greenhouses have become a hot item.

“It wasn’t more than a few years ago that I thought a cannabis plant was a Christmas tree,” agriculture real estate agent Chuck Allen said.

Allen said when the cut flower industry saw huge losses after the NAFTA agreement, many green houses were left to sit and rot. That was until Monterey County leaders stepped in putting a stop to new construction of greenhouses for cannabis cultivation.

“It forced the market to go to the old and somewhat bedraggled properties,” Allen said.

Since then things have really taken off for Allen. He said and in the last 12 months, the market has doubled.

But it isn’t just growers, and real estate agents benefiting from the cannabis boom.

“It’s like a title wave right now,” said Peter Fryn with System USA.

System USA has been in the greenhouse business for more than 30 years. But things changed about two years ago.

“About 50 percent of what we do if for cannabis right now,” Fryn said.

The company will build, replace or repair your greenhouse. It doesn’t stop there. Fryn said they are experts in creating the perfect controlled environment for growing cannabis. But he admits, greenhouses still need the Central Coast’s climate in order to be truly perfect.

“That’s why the climate is so unique. Not too hot. Not too cold. We just make better use of it with our green houses,” Fryn said.

Fryn said the greenhouses aren’t cheap. Sometimes up to $100 a square foot. He thinks it’s a good investment for serious commercial growers. But he understands it’s still an uncertain time for cannabis businesses, especially when it comes to taxes.

“We don’t put a canobie tax on wine grapes or strawberries or artichokes or anything else and I don’t see why this is any different,” Hackett said.

In Monterey County, Measure Y, imposes a $25 per square foot tax on marijuana cultivators. That can add up. But cannabis attorney Aaron Johnson said it can work if the farmer can have at least four or five harvests a year.

“If you have full depravation, full supplemental lighting, basically for the Cadillac of greenhouses the tax makes sense,” Johnson said.

But Johnson admits that’s not always easy. So local leaders are talking about how to change the taxes if growers can’t afford all of the bells and whistles that come with a premium greenhouse.

“There has been dialogue with the county about lowering the taxes lowering the tax if you don’t make those improvements but you do reuse these facilities,” Johnson said.

But despite the taxes, River View Farms is optimistic about the future of cannabis on the Central Coast.

“Just like some of the best pinot grapes are grown here in this area, the same thing with happen with cannabis as well,” Miller said.

The industry is still growing. But everyone who spoke with KION is aware that if there is too much supply then the profit margins could shrink, they also add that it is all about having the right balance between the growers, the consumers and the local government.