According to an October 1 update from Cal Fire, 24 major wildfires continue to burn in the Golden State. Wildfires have consumed almost 4 million acres so far this year in California. One of the major fires that has persisted is the record-breaking August Complex, which is threatening the Emerald Triangle region, where a significant amount of California’s outdoor cannabis cultivation takes place.
On September 24, the California Department of Food and Agriculture (CDFA), which licenses and regulates cannabis growers in the state, released a list of resources for cultivators. The information includes how to file a disaster relief request with the state, requirements around relocating product, and other compliance issues.
The persistence of the blazes continues to put the status of California’s fall harvest in question. A clear picture of the situation will likely not emerge until at least next month, once crops are cut down, dried, and tested. Given the significant amounts of smoke and ash that have blanketed parts of the state over the past several weeks, it is likely that this year’s supply of flower for smoking will be dented, though to what degree is not yet clear.
With elevated demand in legal cannabis markets, the current upward price trend may continue with the harvest if supply is tighter than anticipated. Additionally, if supply in the illicit market contracts as well due to the fires, consumers who purchase from such sources may look to the licensed system, increasing demand further for legal sellers.
However, there is likely to be some downward pressure on flower prices as well. Product that is salvageable, but that still has a smokey smell or other evidence of being tainted by the fires, is likely to still be sold if possible, but at lower rates.
Local developments in California could lead to the expansion of the state’s regulated market and increased sales. According to the San Joaquin Valley Sun, Fresno officials are preparing to open an application period for up to 14 adult-use retail licenses in the city, the fifth-most-populous in the state. No adult-use cannabis businesses have been permitted to operate in Fresno to this point. Legal outlets opening in such a large population center should result in a noticeable boost to statewide sales. However, the Sun’s report notes that officials do not expect stores to actually be operational until August 2021.
Additionally, a report from the Monterey Herald notes that the Monterey City Council this week began considering whether to allow licensed cannabis retailers to set up shop. Numerous cannabis industry observers have noted that, in the wake of the COVID-19 pandemic and its devastating impact on municipal budgets, local governments that previously banned legal cannabis businesses are expected to consider allowing them in order to generate revenue.