Mike Hackett, owner of Harborside Farms, shows off one of the state-of-the-art farm structures he is building in the valley of Salinas, Calif., in May, 2017. Hackett bought greenhouses and is now converting them for cannabis use. (Ray Chavez/Bay Area News Group)

How the War on Drugs crushed California greenhouses and cannabis legalization is bringing them back

SALINAS — The irony is rich. To weaken one mind-altering leaf crop 4,000 miles away, the feds inadvertently crushed California’s cut-flower crop, setting the stage for another mind-altering leaf crop to flourish here decades later.

A preferential trade agreement with four South American countries signed in 1991 — part of the War on Drugs — is largely blamed for the failure of greenhouse nurseries along the California coast but particularly in the Salinas Valley. Now the vacant flower greenhouses are getting snapped up in a land boom as Proposition 64, legalizing recreational marijuana, goes into effect next year.

In Salinas, Steinbeck is out, Cheech and Chong in.

The aim of the Andean Trade Preference Act was to encourage farmers in the Andes to stop growing coca leaves by eliminating agricultural tariffs. The program worked too well. Coca farmers in Ecuador and Colombia began growing cut flowers and selling them into the U.S., where they could now undercut growers in San Diego, Ventura, Santa Barbara, San Luis Obispo and Monterey counties.

By 2009, cut flowers made up the second-leading category of imports under the act, valued at $625 million at the time. In the Salinas Valley, one of the most productive agricultural valleys in the state, the cheap imports were largely credited with the failure of 150 to 200 flower nurseries and the abandonment of several million square feet of greenhouse space. Three years later, NAFTA plucked the final pedal off the rose.

Today, a phalanx of visionaries, land speculators, “ganja-preneurs,” new-age ag advisors, specialized lawyers and even a retired big city mayor and former speaker of the California Assembly have touched off a land boom in the Salinas Valley with its $4.5 billion agricultural economy.

Passing the Visine and watching the action through weary eyes are the farmers who still produce the valley’s leaf lettuce, broccoli, cauliflower, celery, artichokes, strawberries and wine grapes.

According to the American Society of Farm Managers and Rural Appraisers, prime row-crop land in the Salinas Valley sold in 2014 for $55,000 to $60,000 per acre. But reports say parcels with dilapidated greenhouses have now been fetching between $200,000 and $300,000 per acre. Land prices of as high as $55 per square foot are being used in budgeting.

The big mark-ups aren’t due to the actual value of the dilapidated — or sometimes absent — flower greenhouses. Under Monterey County rules, pot growers can grow plants only in existing greenhouses or by building new greenhouses where greenhouses once stood. They aren’t permitted to plant the locoweed on open land. This has fueled the mania.

But many of the greenhouses are in bad shape or too low for pot cultivation. One buyer recently lifted a greenhouse. A team was brought in from Holland — where else? — to raise the structure five feet.

Although the minds of smokers partaking in the valley’s new herb will become foggy, not so the minds of taxation-conscious Monterey County officials. They’ve remained razor-sharp.

A commercial marijuana cultivation tax will be levied at a rate starting at $15 per square foot of plants. One county supervisor believes the pot could bring in $20 million to $30 million annually in new tax revenues. The county will increase the tax rate after 2020 to a maximum of $25 per square foot. (Since the growers can’t typically be banked, truckloads of cash will be pulling up behind the county government center when the taxes come due.)

Also showing no sign of mental fog are the speculators and growers snapping up the greenhouse land.

One group in the land grab is Grupo Flor, an investment firm led by a local commercial real-estate broker and his attorney business partner. The former recently told the Monterey Herald he has never tried the stuff out of religious conviction.

Another player, FLRish, Inc., is reportedly backed by investors from Silicon Valley. Its board members include former San Francisco mayor and speaker of the California Assembly Willie Brown. Brown, once dubbed “the Best Dressed Man in California” by Esquire magazine, shows no sign of any cannabis-induced sartorial slippage.

Under the Andean Trade Preference Act, the president’s authority to give special treatment to coca leaf farmers in the Andes lapsed in 2013. But by then, the damage had been done. A few growers saved their skin by turning to potted orchids.

Now a land boom heats up as speculators and growers anticipate Prop. 64 to kick in, opening a floodgate for the leaf crop as many new recreational users are minted.

Jeremy Bagott is a real estate appraiser for Bender Rosenthal, based in Burbank. This article was first published in the Pasadena Star-News.

This story was first published on TheCannifornian.com