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Buds of Recovery - By jkukura - November 16, 2017 - SF Weekly
SF Weekly

Buds of Recovery

Marijuana growers in the North Bay lost millions of dollars of product and supplies during the recent fires. (Photo by Jessica Christian)

Marijuana growers were burnt twice in last month’s Northern California wildfires. The fires did significant damage to at least 44 cannabis farms, burning down many of those operations entirely. Then, North Bay cultivators were hit with another demoralizing setback when a crowdfunding campaign to help cover their losses was shut down in a fit of marijuana prohibition, robbing them of more than $25,000 in relief-fund donations.

But a new industry effort has just puffed and passed that total — raising six times the amount in its first week of existence. Nonprofit CalGrowers Wildfire Recovery Fund blew the previous fundraising total out of the water, and it’s busy creating a new framework for reliable insurance and financial stability to guarantee that California’s legal marijuana farmers won’t ever be wiped out like that again. “We have raised close to $150,000 to help folks with recovery,” California Growers Association Executive Director Hezekiah Allen says. And it did so within its first eight days of incorporation, while the terminated online crowdsourcing campaign had only raised $25,000 in five days.

The fires had been destroying the pot-growing regions of Sonoma and Mendocino counties for more than a week when the California Growers Association initiated its first fundraising campaign on the website YouCaring. Since marijuana farmers are ineligible for insurance or FEMA disaster recovery funds, that money was the only assistance they could receive.

But even that was withheld. On Oct. 16, YouCaring abruptly shut off the campaign without distributing any of the funds to affected growers.

“Our payment providers WePay and PayPal do not allow fundraisers for anything marijuana-related, including for medical reasons,” a YouCaring spokesperson said in a statement to SF Weekly. “Current U.S. federal law prohibits the purchase and sale of marijuana. Subsequently, our payment provider is unable to process payments connected to the production or sale of cannabis.”

SF Weekly also reached out to WePay, who’d ordered the campaign shut down. “WePay’s bank and card association partners prohibit us from processing payments related to marijuana,” a WePay spokesperson said. “We cannot process funds directly related to cannabis crops.”

That campaign’s donations were sent back to the contributors. But this left the newly formed CalGrowers Wildfire Recovery Fund scrambling to get those who gave to redonate to a new fund.

They succeeded handsomely. After raising an initial $150,000 from prior donors and several industry benefactors, the recovery fund threw fundraising events across the state — including a Los Angeles event that featured an appearance by Melissa Etheridge.

But that money only represents a one-time payout to growers affected by the North Bay fires. There will surely be other natural calamities in California’s future, so the fund is working on a framework to ensure that future catastrophes don’t wipe out people’s farms and life savings.

Marijuana growers are woefully underinsured, so the CalGrowers Wildfire Recovery Fund partnered with Heffernan Insurance, one of the largest privately owned insurance brokers in California, to offer new forms of insurance to the nascent legal cannabis industry.

Heffernan Insurance Brokers is the exclusive, endorsed insurance broker to the California Growers Association,” says Heffernan Group Director of Corporate Development Steve Williams. “We represent all of their members and all lines of Insurance for businesses in the cannabis industry, from workers’ compensation to product liability to delivery and transportation.”

If you Google “cannabis insurance,” you’ll see a few results with cheeky names like “OG Cannabis Insurance” and “InsureYourCannabis.com” that are clearly not established, legacy insurance providers. Heffernan Insurance Brokers has been a reputable insurance supplier for nearly 30 years — so it’s not just some fly-by-night operation.

Like the online fundraising sites, the insurance industry is largely afraid of doing business with cannabis companies because the product is federally illegal.

“There are definitely areas that don’t have sufficient coverage,” Vice President Marshall Nehring says. “Our goal would be to take the control out of [insurance] carrier’s hands and place it within the industry’s hands, allowing them to buy affordable coverage that provides the actual liability or property or workers’ compensation insurance that they need.”

“This is a marathon and not a race,” he adds. “But that’s our end goal, to make sure these guys are able to get what they need and actually be covered at the time of loss.”

The cost of recovering the marijuana growers’ operations is estimated at $3.4 million, so even the hundreds of thousands raised by the CalGrowers Wildfire Recovery Fund can’t make those farms whole again. But steps toward insurance helps the weed industry grow into a more stable enterprise when California begins issuing legitimate cannabis cultivation licenses on Jan. 1, 2018.

You can contribute to the CalGrowers Wildfire Recovery Fund at emeraldgrowers.nationbuilder.com/wildfire