'No more tears left:' How wildfires are ravaging the West Coast cannabis industry

To an outsider's eye, Canyon Cannabis might've appeared like a small-town, rinky-dink pot shop.

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Alicia Wallace
, CNN Business
CNN — To an outsider's eye, Canyon Cannabis might've appeared like a small-town, rinky-dink pot shop.

Housed in an unassuming building off a scenic highway, it was the lone dispensary in the 500-person city of Gates, Oregon.

Inside, though, visitors were greeted with an explosion of color and sound.

A vintage Pioneer sound system bathed the room in music — Jimi Hendrix, Stevie Wonder, old ska and blues — from owner Thorin Thacker's personal collection of 3,000 vinyl records he kept on site. Sometimes the soundtrack was provided by Thacker himself, a musician and Latin dance instructor, who would pick on an 1882 Fairbanks & Cole banjo or tinker away at the century-old piano placed in the lobby.

Beyond the experience, the dispensary's curated selection of craft cannabis and hand-blown glass pipes from local artists helped attract a loyal clientele that included Portlanders from 80 miles away.

Now it's all gone.

On Sept. 8, the Beachie Creek Fire tore through the canyon, devastating Gates and leveling Canyon Cannabis.

The fire burned so hot, it turned the safe to Swiss cheese, disintegrating the money left inside. The locally made glass pipes and bongs melted into a clump of art. Metal scraps were all that remained of the banjo and piano.

"I'm just all cried out," Thacker said. "I've got no more tears left."

Canyon Cannabis is one of thousands of pioneers that got in on a fast-growing, multibillion-dollar industry on the West Coast. The recent wildfires underscore the unique hurdles that cannabis businesses encounter in trying to survive.

For operators who lost everything to the deadly wildfires, there's little recourse and only the shakiest of safety nets. Insurance companies, like banks, are reluctant to serve cannabis businesses because marijuana remains a federally illegal substance. And because of that illicit status, the enterprises don't qualify for federal disaster aid.

Thacker estimates his losses at more than $250,000. His inventory could not be insured. After pouring his heart and soul into his enterprise, and paying almost $500,000 in local, state and federal taxes in nearly three-and-a-half years of business, Thacker's back to square one.

"It just doesn't seem to be fair that after we provide so much tax income that we don't get to participate in any of the reasons you rely on the government to help you out," Thacker said.

And even for operators whose cannabis businesses and plants were spared, the wildfires still present a mess of potential issues such as smoke damage, contamination, smaller buds, stressed out plants and end products that might not pass regulatory or consumer muster.

"We work all year for this period of time, when we're working around the clock to bring in a successful harvest," said Nathan Howard, co-founder and president of East Fork Cultivars, which specializes in breeding and growing CBD-rich, adult-use cannabis and hemp. "Most of our success in 2021 is determined by how successful we are during these six weeks, the end of September and October."

For several weeks now, the situation has been touch-and-go, he said. The 155,000-acre Slater Fire has surrounded much of Takilma, the small Oregon community home to East Fork Cultivars' 33 acres. Flames have come within a mile.

Howard and a small crew have stayed back to tend to the plants as ash and charred leaves rained down from above. They put out spot fires that cropped up nearby, and they scraped and dug down to the mineral soil to create strips of fire lines to serve as barriers.

"The fire burnt right up to the fire line and no further," he said. Still, Howard said, "It's hard to celebrate or feel good because our neighboring towns, Phoenix, Talent, Ashland, Detroit, they're either all gone or mostly gone."

East Fork Cultivars has been through fire seasons before, so Howard remains optimistic that the product the farm has been growing won't suffer ill effects.

However, the farm lost two weeks of full operations and is now behind the ball on the all-too-critical harvest season. One bad year might not break most farmers, but it could spell ruin for East Fork Cultivars and other cannabis cultivators that don't have access to crop insurance or federal aid, he said.

'Stillness in the air'

On Sept. 9, as a red glow filled the sky and ash fell like a light snow, Tina Gordon feared the worst.

The historically massive August Complex Fire shredding its way across Northern California was heading toward Gordon's Moon Made Farms, a 40-acre cannabis cultivation site in Humboldt County, California.

"There was a stillness in the air that was absolutely terrifying," Gordon said. "No birds. No wildlife. Everything had taken cover."

Growing cannabis, especially outdoors, is an incredibly costly and risky affair, especially when those operations can't easily be insured, but Gordon said her primary goal was to protect human and animal life while also preserving the possibility for recovery.

Gordon opted to follow the mandatory evacuations and grabbed some cannabis seeds as she left.

"The stuff doesn't matter, the vehicles don't matter, the infrastructure really doesn't matter," she said. "It's the land and the genetics."

Gordon returned nine days later, after the evacuation orders had lifted, to find the farm had been mostly spared. They lost some of the vegetables that weren't on automatic irrigation, but the cannabis plants remained.

The focus now has been on cleaning the plants, preparing them for harvesting and testing to ensure the products are safe and free from impurities, she said.

Concern has risen among some cultivators in California about the potential damage caused by the heat, ash and smoke, said Jill Ellsworth, founder and chief executive officer of Willow Industries, which specializes in decontamination and remediation for cannabis flower and harvested plant material.

She said some clients reported instances of smoke damage, premature flowering and other factors that can lower the quality and potency of cannabis or even ruin entire crops.

If the environmental stress results in smaller buds and lower yields, that could lead to losses up and down the supply chain, Ellsworth said.

Complete losses

In Oregon, 20 licensed cannabis businesses had operations in wildfire burn zones and 12 were complete losses, according to the Oregon Liquor Control Commission, which oversees the state's cannabis industry.

"But we suspect the impact is greater than what we can find on a [Geographic Information System] map," said Mark Pettinger, spokesman for the OLCC's recreational marijuana program.

In addition to the destroyed operations, other cannabis businesses have reported partial crop loss and damages to infrastructure and irrigation systems, according to OLCC.

The placement of the Oregon wildfires has been particularly challenging for hemp growers as the fires have eaten into one of the nation's most productive regions for the crop.

As of Sept. 16, about 17% of the state's hemp cultivation sites were facing imminent danger from wildfires, according to an analysis from Hemp Benchmarks, a provider of data and research for the industry.

The smoke, ash and other fire-generated debris pose a significant contamination risk to hemp crops, especially those that will supply the smokable hemp market, according to the report. Some crops were damaged by the high winds that accelerated the deadly blazes and others suffered water loss as power outages interrupted irrigation systems, Hemp Benchmarks found.

"Hemp [grown for CBD] is a pretty high-cost crop to farm; people are putting a decent amount of money in per acre relative to growing corn or soybeans," Adam Koh, Hemp Benchmarks' editorial director, told CNN Business. "That's sort of an extra kick in the pants right there."

Last month, Oregon Senator Ron Wyden and other Oregon Congress members introduced a bill that would allow state-legal cannabis businesses to qualify for disaster recovery programs. Like most cannabis-centric legislation, the bill is expected to face stiff opposition in the Republican-led Senate.

Canyon Cannabis' Thacker said he's hopeful for legislation of that nature, but "I'm certainly not going to hold my breath."

For now, he's relying on a GoFundMe campaign to help generate funds to rebuild Canyon Cannabis either in Gates or the nearby Mill City, where he once served as mayor.

"That's a lot of magic to recreate," Thacker said. "I know we can do it, but it's not going to be easy."

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