What to Know
- Proposition 64, the Adult Use of Marijuana Act, was approved by voters on Nov. 8, 2016.
- The law legalizes the cultivation, possession and use of marijuana by adults for nonmedical purposes.
- The state begins issuing licenses to commercial marijuana cultivators on Jan. 1, 2018.
Inside an air-conditioned warehouse in a dusty Southern California desert city, bud trimmers in white smocks clip the flowers of marijuana plants at a business that caters to "boutique cannabis connoisseurs."
Nearby, work crews put in the finishing touches on two 20,000-square-foot warehouses in sweltering triple-digit heat.
Vacant lots pocked with burroweed and desert scrub that the city once couldn't give away are being snapped up.
Desert Hot Springs, a city known for its award-winning "miracle" mineral water, retro-hip motels, and nude spa resorts, is home to a burgeoning industry — commercial pot farms.
"This is a historical moment for Desert Hot Springs," said Mayor Scott Matas, at a grand opening in September for Canndescent, the city's first permitted cannabis cultivator.
"Desert Hot Springs has been reactive for so many years in different industries, trying to find its niche. I just couldn't [be] more pleased to be mayor of this community and lead these efforts today."
With the promise of millions of dollars in tax revenues and an infusion of jobs, cities and counties across the state are writing ordinances to allow pot cultivators as the state prepares to regulate and enforce Proposition 64, the recreational marijuana law, on Jan. 1.
"It's called the green rush," said Bob Selan, a lawyer and investor who has several cultivation projects in the works in Desert Hot Springs and across the state. "It is very similar to discovering gold."
In neighboring Cathedral City, a city of 55,000, officials are issuing licenses to pot farmers who are turning vacant warehouses into greenhouses. The city says it will see $1.2 million in the next fiscal year in tax revenues from marijuana businesses, said Charles McClendon, the city manager. That includes dispensaries and marijuana extraction businesses.
Desert Hot Springs, which avoided bankruptcy and possible insolvency several years ago by making deep city cuts, is pinning its hopes on marijuana cultivation. Even though the city has steadied its financial situation in recent years, the bedroom community has little income and 85 percent of the city's 30,000 population works outside of the city.
"We hope these cultivations generate thousands of jobs and provide good paying jobs for people in the city so they don't have to drive down valley," said City Councilman John McKee.
While he celebrates the green rush, he's also cautiously optimistic.
"Some will be successful and some won't," he said. "We have to make sure that we're not betting everything."
Paula Turner, who sells commercial real estate in the area, was reluctant to take on marijuana growers as clients because of the stigma. The federal government still classifies marijuana as an illegal drug.
"I didn't support marijuana," she said. "But after meeting all the people and all the things it can do on the medical side, that's what I'm excited about. It's going to turn the whole city around."
The growers, who spent years looking over their shoulders at risk of a felony arrest, feel like they're finally trading in the drug dealer label.
"This is crazy," said Randy Patten, who spent 24 years growing marijuana and is now the master of cultivation for Canndescent at the grand opening. "It's a huge day to be in a city that we're welcome."
More than 50 entrepreneurs have applied for permits to open marijuana farms in a 2-square-mile light industrial zone in the center of Desert Hot Springs. Several have broken ground.
Greta Carter, a former activist who once lobbied in the state of Washington for laws that govern safety for medical marijuana patients, distributors, growers and providers, plans to open Freedom Flower, a 30,000-square foot indoor marijuana farm, this summer. Eighteen employees will produce 400 pounds of weed a month, she said.
"It's pedal to the medal right now," said Carter, who's mirroring her business after popular vineyards like Robert Mondavi.
"No ego," said Carter. "You tell us what parameters you want for your product and we'll grow it."
Next door to Freedom Flower is Canndescent. It sits behind a fence on an 11,000-square foot lot off Two Bunch Palms Trail.
Inside two warehouses, marijuana plants are fed by 300 lights and an automated irrigation system. Giant tanks pump in CO2. Computers control air conditioners that regulate temperatures through the plants' life cycle.
The company's 31-page press kit says that motion sensors, access controls, vibration sensors, bank vault doors, and 64 security cameras publish to an encrypted IP address for real-time monitoring by the police department. The company is already planning for expansion.
"I feel very comfortable we'll be one of the top 10 white-market producers," said the company's CEO Adrian Sedlin, who has an MBA from Harvard, is a lifelong entrepreneur, and lives in Santa Barbara County.
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The city's police chief says his department is ready for the boom and has taken security seriously. Because marijuana is illegal federally, many cultivators and dispensaries are cash-only, he said.
So Desert Hot Springs requires that each facility ensure its security with metal doors, employee-only key card security systems, video cameras and round-the-clock armed or unarmed security guards.
"Our security requirements are pretty strict," said Dale Mondary, the city's police chief. "Only a complete moron is going to try to break into one of those places. We are hoping for the best and preparing for the worst."
With the boom come the logistical pains of growing marijuana in a quiet desert town. Construction crews are building on dirt lots, some with no water and power. Utility officials say they are working with developers to resolve these issues, but to entrepreneurs, eager to earn, it's frustrating.
"Desert Hot Springs, like all, if not most of the desert communities, never contemplated industry," Selan said. "Water and power is critically important and not readily available in most places. Very few cities have been geared up to do this. But this is absolutely the cost of doing this kind of business."
Residents are supportive.
"We're counting on this for tax money," said Ron Gilbert, who's lived in Desert Hot Springs since 2004 and blogs about city issues at Ron's Log: Life in the desert. "We hope the industrial area gets filled up with cultivators and they stay and grow stuff for years."
It's a trend happening up and down the state. The county and city of Los Angeles are considering ordinances to allow indoor pot cultivation. Long Beach began permitting marijuana growers in May.
In Northern California, cities such as Berkeley are issuing pot farm licenses. Monterey County, the world's "Salad Bowl," with an $8.1 billion agriculture industry, is seeing a pot boom.
"We do have a lot of interest in Monterey County," said Carl Holm, a resource management agency director overseeing land use for cultivation in the Salinas Valley. "What we're trying to ascertain is how sustainable it is. Is it going to be a bubble? There's a lot of money in it right now. How long will it last?"