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Cannabis, utilities hold potential for economic development

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Better economic coordination between small cannabis growers could buffer them against competition from large capital interest, says UC specialist Keith Taylor.
Keith Taylor has the same goal in tackling two of the economy's thorniest sectors: keep them small and localized.

As the West strives to recover from the pandemic-induced economic slump, the University of California's Keith Taylor is taking an unconventional approach to economic development.

In the world's sixth biggest economy, where do you start? Taylor, who was hired in 2017 as UC Cooperative Extension's sole specialist in community economic development, started by tackling a couple of the state's thorniest sectors: cannabis and utilities.

Mendocino County cannabis

In 2016, the passage of Prop. 64 legalizing recreational cannabis ushered in an era of both opportunity and headaches for Mendocino County growers.

The county's permitting program has been the source of significant confusion and debate: Between 800 and 1,100 growers have received county permits, but many have not been able to obtain permanent state licenses because of a lack of clarity around the county process and compliance with the California Environmental Quality Act. 

The burden of uncertainty is one reason why only a fraction of Mendocino growers have pursued licenses, says Taylor, who is based in the Department of Human & Community Development at UC Davis. 

While these regulatory battles play out, Taylor says better economic coordination between small growers could buffer them against large capital interests moving into cannabis.

Virginia-based Altria, the parent company of Philip Morris USA, is investing in cannabis and filing patents for cannabis-specific vaporizers. Individual legacy growers have the crop experience and market share, Taylor says, but don't have shared institutions through which they can exercise collective power — especially down the value chain in processing, distribution and consumer technology.

Taylor believes that creating a small farmer-centric system will involve the creation of more interest groups, associations or cooperatives.

“For too long in agricultural and rural communities, we've encouraged people to do things alone,” Taylor said in an October 2020 presentation to the UC Davis Cannabis and Hemp Research Forums. "However, if you look at parts of the world where rural economies do very well, they work together.”

Participatory research project

With help from a Cannabis and Hemp Research Center grant, Taylor has been working on a wide-ranging participatory action research project in Mendocino County.

Taylor's team — comprised of two faculty members, one post-doctoral researcher, and two student researchers — is producing research publications, policy recommendations and public events about ways that the emerging cannabis industry can support high-quality livelihoods and environments for county residents. 

“The more we make folks aware of these good actors, the more likely we are to get challenges to the incumbents in terms of climate mitigation and economic developments,” Taylor said.

West Business Development Center, Economic Development & Financing Corporation and Mendocino County Supervisor John Haschak have been allies in the process so far. Haschak says Taylor brings valuable knowledge, resources and networks to bear on local challenges.

“There's a lot of opportunity for doing this whole new industry in a new way, and I think that's what Dr. Taylor sees too,” Haschak said. “There's a lot of potential here for structuring the industry along the lines of what our community values already are.”

As Taylor's team releases their findings, they intend to host forums at the Hopland Research and Extension Center to help the county harness the legal cannabis sector for economic impact. 

Power to the people

Shortly after arriving at UC Davis from Illinois, Taylor published a book about the benefits of community ownership of wind energy in the Midwest. The turmoil surrounding California's largest utility, Pacific Gas & Electric, could have been ripped from the pages of his research. PG&E equipment has ignited half of California's most destructive fires since 2015, and experts pin much of the blame on the company's lack of investment in the grid.

In the months following the 2018 Camp Fire, which burned an area roughly the size of Chicago and killed 85 people, Taylor was one of the first advocates to propose converting PG&E into a user-owned nonprofit cooperative. This conversion would remove the extractive role of investors and give customers a voice in big-picture decisions about the company, Taylor wrote in an op-ed pushing the idea of customer ownership in The Mercury News in February 2019.

By December, more than 100 elected officials across 10 counties endorsed the idea. The federal bankruptcy judge overseeing PG&E's case did not endorse the plan, although it's still possible for the state to take over the company under certain conditions. Other attempts to gain local control of PG&E's grid — including San Francisco's bid to buy the city's power lines from the company — also stalled.

Taylor isn't discouraged. He is working closely with the Golden State Power Cooperative, an association of the state's three community-owned electric utility co-ops, to push forward what he calls a “Rural Electrification Act for California broadband.”

Taylor often references this New Deal-era law that gave federal loans to rural communities seeking to expand the electrical grid to their area. The act gave rise to the nation's more than 900 electric cooperatives today, including the three in California.

With their help, Taylor sees opportunity in legislation or programs that would catalyze community-initiated, community-owned internet services. Plumas-Sierra Rural Electric Cooperative is already bringing broadband to the rough terrain of its mountain customers.

“When you first set foot in California and are exposed to the giant that is PG&E and their influence over policy, you think that it's an obstacle that's too difficult to overcome,” Taylor said. He tries to elevate the visibility of people who are making inroads and recently featured Kevin Short in a webinar about community economic-development innovations.

'Tremendous opportunities'

Short is the general manager of Anza Electric Cooperative in California's high desert and current board president of the Golden State Power Cooperative. He said there are “tremendous opportunities” in the idea of growing cooperative broadband entities, especially with the attention on infrastructure at the state and federal levels.

Short said the effort will take some creativity and willingness to depart from existing models: “The old saying among us here is if you've seen one co-op, you've seen one co-op, because it's going to be different everywhere you go.”

In both of these areas — cannabis and utilities — Taylor says his role is networker and facilitator. As the only economic development specialist at UC Agriculture and Natural Resources, he spends a lot of time researching and meeting people to understand where his efforts can be the most strategic.

“In order to scale, I've got to go small, root and build and be comfortable with that process,” he said.

Small works for now, but Taylor remembers an associate dean telling him, “You've got a great job, now make it work for 40 million Californians.”

[Olivia Henry is a UC Davis graduate student intern.]

Source: University of California Division of Agriculture and Natural Resources, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset. 
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