How Small Farm Cannabis Lost (Analyst Note 2024)

Paradox Cannabis Insights sees the future of small farm cannabis as underground, small-grower cooperatives — and the rest is mega-farms.

Paradox Psychoactives is a project of Enthereal, covering cannabis and retail developments around emerging therapeutics.

The fate of an industry hangs in the balance, one that’s too big to ignore with billions in revenue, and so poorly managed, a once-thriving industry risks ceding its chances to mega-farms that seem only to fail up. We’re talking about cannabis, not only in California but nationally.

The small farm cannabis entrepreneurs in California have fundamentally failed to protect their own interests, and here’s how:

1. Lack of Unified Response: When the state removed the 1-acre cap in 2017 – arguably the single most destructive decision for small farmers – there wasn’t an effective, organized pushback from the farming community. Instead of mobilizing immediately and creating sustained pressure, they largely responded as individuals rather than a unified force.
2. Poor Public Messaging: Despite having a compelling narrative about multi-generational family farms and sustainable practices, these farmers haven’t effectively communicated their value proposition to California consumers. They’ve allowed themselves to be quietly pushed aside without building public support for their preservation, similar to how other agricultural communities have successfully rallied public sentiment.
3. Business Model Adaptation Failures: While watching wholesale prices plummet from $2,000 to as low as $100 per pound, many small farmers remained stuck in old operational patterns instead of aggressively pursuing alternative business models or collective action strategies. They’re getting outmaneuvered by operations like Glass House Farms, which is now producing more cannabis than all of Humboldt County combined.
4. Political Naivety: They took Gavin Newsom’s 2015 promises at face value without building real political leverage to hold him accountable. Taking selfies with a politician isn’t the same as creating meaningful political pressure – a lesson they’ve learned too late.
5. Fragmented Advocacy: The farmers’ market bill veto is a perfect example of their ineffectiveness. Instead of building a broad coalition and mounting a compelling public campaign, they allowed their initiative to be dismissed with vague concerns about “significant strain” on state government.

The harsh reality is that these entrepreneurs are now past the point where individual success stories can reverse the industry’s trajectory. Without immediate, coordinated action to build public support, secure political influence, and develop alternative business models, the remaining small farmers will likely follow their former colleagues into extinction.

The time for gentle adaptation is over – they either need to radically change their approach to survival or accept their fate in an industrialized cannabis market.

Those invested in seeing a thriving – not only winner-take-all – industry, get in touch.

• Cooperatives are a model likely to see more interest.
• Small growers for personal and community use may see increased interest.
• Giant farms will outcompete smaller farms, with little smaller farms can or will do to stop the giant farms.