Multi-tenant permitting refers to a practice of putting multiple cannabis grows under separate permits on the same parcel. The practice became a major source of controversy in 2021 when it was shown to be abused by a small number of large cannabis corporations to circumvent environmental regulation, eliminate public review and create grows far in excess of cultivation sizes allowed under Sonoma County law.
The current Cannabis ordinance caps all cultivation at 1 acre (43,560 sq feet) on a minimum 10-acre parcel and provides growers with two options for permitting (see more about the full ordinance here).
In all cases, a cultivator is required to obtain an annual license from State Department of Cannabis Control (DCC) in addition to County Permit.
Separately, the county allowed for the possibility that a single parcel can be used by multiple growers, establishing the concept of Multi-Tenancy.
2f. Multiple permits maybe issued for multi-tenant operations on a single parcel provided that the aggregate cultivation area does not exceed the maximum area allowed for cultivation type and parcel size in compliance with Table 1A-D Allowed Cannabis Uses and Permit Requirements
TThe intent of the ministerial permit and of multi-tenancy was to create a lower permitting burden for truly small independent cannabis producers, encouraging them to legalize their operations while minimizing overall impacts. Thus two farmers could grow 5,000 sq ft each or 4 farmers could each grow 2,500 sq ft of cannabis on one parcel of 10 acres or more without each going through a full environmental review, as long as the total size is no more than 10,000 sq ft.
Further, the county capped a “single person” at a maximum of 1 acre of cannabis grown, across all parcels in Sonoma County.
"2e. Multiple cultivation permit applications will be processed concurrently. Multiple cultivation permits may be issued to a single person, provided that the total combined cultivation area within the county does not exceed one (1) acre. For the purposes of this provision, the entire cultivation area of a permit shall be attributed in full to each person who meets the definition of cannabis business owner of the permit holder.
On the State level, the State Department of Cannabis Control (DCC) licensing requirements are clear that, until 2023, the largest grow allowed for outdoor cultivation is 1 acre per person – which is a defined term. (DCC Cannabis Regulations Article 1. §15000. Definitions. “Person” includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.”)
The Ag department advertently or inadvertently did not correctly apply the provisions of the ordinance.
Between 2018 and fall of 2021, they issued over 100 permits that violated these requirements, often approving up to four 10,000 sq ft permits per single parcel, and often to entities controlled by the same parent entity, under the ministerial permitting process.
This, in effect, allowed up to 40,000 sq ft of cannabis cultivation on a single parcel with neither environmental review nor public hearings. And, allowed a for “person” to control well in excess of 1 acre of cultivation in Sonoma County-- in defiance of both State and Sonoma County regulations.
A case study: LLCs and persons related to one large cannabis businesses, submitted 56 applications, each for 10,000 square feet of cultivation and the County staff issued the permits, with most issued in sequential order. These permits alone resulted in nine parcels with large-scale cultivations (each having 40,000 square feet or nearly 1 acre), and one parcel having 160,000 square feet of cannabis cultivation with no environmental review
After multiple appeals to the Sonoma County Board of Supervisors (BOS) presenting evidence of the problem with this non-compliant permitting, the Board took action to stop new illegal permits from being issued. On October 26, 2021, the BOS voted for a Moratorium stopping all New Large-scale Multi-tenant Permits from being issued, expiring in September, 2023.
However, at the same time the BOS granted a 5-year extension to the over 100 current permits who gamed the system.
As Sonoma County is the only California county that grants multi-tenant ministerial cannabis permits, the State Department of Cannabis Control’s (DCC) now has a complex task of resolving these illegally granted permits. Currently, the State is working with applicants to bring the permits into compliance, including site specific environmental review.
Small family producers, the espoused beneficiaries of Prop 64 and the County ordinance, or growers who followed the rules, are now at a significant competitive disadvantage, working smaller size operations with a one-year renewal cycle. The cannabis cultivation field is now tilted in favor of two large growers who, with their 5-year permits, have significant runway to plan, grow and finance their business. And, there is little incentive to expedite the required technical reports to bring these cultivations into compliance with State and County regulations. Since in each case permits were issued absent State required environmental review and a public hearing - despite the cumulative size of the cannabis cultivations and significant demand for scarce water resources - the long term environmental impacts are unknown and damage to neighboring wells, properties or wildlife is currently unabated.
CannaCraft and SPARC were awarded 72 of the 104 permits – 70% of all the non-compliant permits issued since 2018. CannaCraft and SPARC have 16.5 acres of cannabis, significantly exceeding the 1 acre maximum per grower. Further, in numerous cases these entities have submitted four 10K sq. ft. ministerial permit applications on a single parcel, the net result being 40K sq. ft. of cultivation, far exceeding the 10K sq. ft. allowed under a ministerial permit, and close to 1 acre on a single parcel.
CannaCraft and SPARC obtained multiple large-scale permits under different LLCs and corporate names, which appear to be directly connected to their businesses. These County issued permits violate two County regulations: prohibiting more than one acre of cannabis cultivation per person, and the prohibition against issuing ministerial permits for more than 10,000 square feet of outdoor cultivation on any one parcel.
CannaCraft related businesses were granted 56 applications, each for 10,000 square feet of cannabis cultivation, for a total 560k sq. ft. of cultivation / 12.7 acres, resulting in nine parcels each having 40,000 square feet of cannabis cultivation, and one parcel having 160,000 square feet. All businesses had a single ultimate controlling owner, and applications were submitted and granted in sequential order (e.g. most submitted in groups related to the same parcel)
SPARC related businesses were granted 16 applications, each for 10,000 square feet of cannabis cultivation. Four ministerial cannabis permits for 10,000 square feet each for the four WINGO RANCH LLCs totaling 160,000 square feet / 3.7 acres of cannabis, all issued to businesses directly related to SPARC, in violation of the law The permits were for four adjoining parcels, which creates a much larger concentration of cultivation in a local area, with minimum requirements for water availability and other studies to protect adjacent properties.
By piecemealing their applications, the large growers avoided project/parcel-specific environmental review required by State Dept of Cannabis Control (DCC), State California Environmental Quality Act (CEQA) and the County ordinance. Impacts that could have been reduced by conditions of approval with required protections built in at the front end may now end up with long term, hard to mitigate damage to sensitive environmental resources, adjacent property owners, and the community.
Neighbors do not learn about a ministerial permitted cannabis grow until the fences go up. With no public hearings, concerned citizens and neighbors had no opportunity for input or standing in the permitting process; yet, the impacts include a reduced ability to enjoy their property due to odor, increased crime risk, well water concerns, lower property values, and an overall decrease in quality of life.
The 100 permits that received 5-year extensions are operating without required project-specific water availability studies. Currently, the State Department of Cannabis Control has intervened to ensure required water studies identify protections for groundwater resources and adjacent wells on these projects, but the cultivations continue to operate in the meantime. In the third-year of a drought, the long-term damage may already be done.
These risks were highlighted during the County’s attempt to pass a Ministerial Permit Ordinance in early 2021, by National Marine Fishery Services (Letter Feb 26, 2021), Friends of Mark West Watershed, environmental organizations and in various public comments. Both the NMFS and FMWW flagged that a lack of surface and ground waters studies made it impossible to know the true impact on wildlife. Note: The draft Ministerial Ordinance was set aside as it did not comply with CEQA and other State laws.
Lastly, the cost of these impacts has been shifted to the Public – other taxpayers. Where the Conditional Use Permit process would have required studies and mitigations before issuance, now, significant acreages of cannabis cultivation are operating without these protections – risking significant damage that in essence shifts the cost of addressing the impact onto the County public funds and its taxpayers.
In the Summer of 2021, Members of the Neighborhood Coalition pointed out to the County that growers were gaming the system by piecemealing their applications into multiply smaller size submissions, resulting in the County issuing multiple ministerial permits for these projects with no public notice, no ability to object or appeal, and no compliance with the California Environmental Quality Act (CEQA). The County realizing their error could result in legal liability, on September 21, 2021 issued a temporary 45 day Moratorium on all new Multitenant (MT) permits (“Board of Supervisors adopts urgency ordinance to curb misuse of multi-tenant commercial cannabis policy”). On October 26 2021, the BOS extended the moratorium for approximately 2 years (Sept 10, 2023) and grandfathered in 104 existing MT permits with 5 year extensions.
In March 2023 the Planning Commission recommended permanently adopting the terms of the Moratorium, namely that Multi-Tenant Operations with Multiple zoning permits may be issued on a single parcel provided that the aggregate cultivation area does not require a use permit. Further, any parcel with over 10,000 square feet of cannabis required discretionary and environmental review under the Cannabis Land Use Ordinance and CEQA. The Board of Supervisors are set to approve such at June 6 2023 meeting.
Copyright 2021 Neighborhood Coalition Sonoma County
