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California Wildfires and Marijuana Burning

Veteran News
Veteran News
October 16, 2017
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The California wildfires have destroyed everything in their path. At present, the death toll is at 40, with firefighters struggling to contain the several massive wildfires that have ravaged Northern California for almost a week. The fires are literally eating up the earth and leaving nothing left. Homes, vehicles, and businesses are all sharing in the loss. Most of them have insurance to help make things right when the fires die down. That’s not the case for one industry: Marijuana.As California is set to legalize recreational cannabis sales across the state, farms popped up forming what is affectionately named the Emerald Triangle. As safe as the marijuana business seems, with nearly everyone partaking, the risk is actually tremendously high if anything goes wrong at the farm. Farmer's usually invest around 8 million dollars towards getting a farm set up and growing. “If their facilities burn down, a lot of these people won’t be able to get any economic relief for them from an insurance claim,” says Derek Peterson CEO of Terra Tech. Terra Tech is a major player in the cannabis game, with most of their product being used for medicinal purposes, therefore exempting them from much of the federal government’s crackdown on the drug. Insurance companies, due to federal regulations on marijuana, cannot be involved in any sort of business regarding the sale or insurance of the plant. Banks can’t take the money from sales and insurance can’t provide a safety net during natural disasters. The risk is tremendous for those who wish to break into this up and coming sector of commerce.While some may think “Good riddance” because of their disdain for the drug, this will have far-reaching economic repercussions. Most farmers borrowed this money, expected a high yield and fast turnaround given the popularity of marijuana. Now they have nothing and no way to pay the huge debt. All one needs to do is simply crack open an Econ 101 textbook to realize that this loss of a product/service cannot be good for the economy. What promised to be a gigantic tax boon for the struggling finances of California is now another burden for them to bear. Although the overall supply won’t be affected because of a large number of farms around the state, those who’ve lost everything have nothing to fall back on. Josh Drayton, a spokesman for the California Cannabis Industry Association said it’s too early to tell how many of the 10-15 thousand farms have been destroyed by the fires.

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Josh expects “the devastation is expected to be larger than anybody would hope it to be” as the fires sweep through the fertile land that marijuana growers share with the California wine industry. With over 170,000 acres burned and the fires still raging, one can only assume that more crops will be lost, sending more small business owners into crippling and unending debt. Given the current devastation due to hurricanes and these wildfires, the last thing we need is more people losing their livelihood.

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