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California undergoes an average of 7,500 wildfires per year, according to The California Department of Forestry and Fire Protection (Cal Fire). Of the over 16,000 structures and over 47,000 acres destroyed in the recent rash of wildfires in Southern California, many cannabis businesses were included—mostly suffering from smoke damage, which quickly destroys the flower, and power blackouts. The most recent wildfire disaster in Los Angeles was one of the costliest in U.S. history.
On Wednesday, Governor Gavin Newsom issued an executive order providing resources and relief to those affected, ordering a one-year fee deferral to state’s Department of Cannabis Control (DCC) license holders that have fees due before July 1. It applies to are located mostly in the Lost Angeles area in the following zip codes: 90041, 90049, 90265, 90272, 90290, 90402, 91001, 91024, 91103, 91104, 91107, 91367, and 93536. Some dispensaries were in evacuation zones or had to close, like Rise in Pasadena, run by Green Thumb Industries, or 99 High Tide in Malibu.
It’s the latest round of attempts to help cannabis businesses impacted one of California’s worst wildfire disasters. On Jan. 8, the DCC issued an announcement that license holders can request disaster relief from the agency. But business owners said they were confused about the wording, particularly the definition as to who was affected by the fires.
The California Cannabis Industry Association (CCIA) directed cannabis businesses in the state to the DCC’s and the governor’s relief programs. “CCIA stands in solidarity with the communities impacted by the wildfires in Los Angeles and the surrounding areas,” a representative of the CCIA said in an email. “Our hearts go out to all those affected, including our members, employees, and partners who are facing unimaginable challenges and hardship during this difficult time.”
“Wildfires continue to be a significant risk—not only to the health and safety of Californians, but to cannabis operators across all levels of the supply chain. We are deeply concerned about the immediate and long-term impacts on businesses and their employees, particularly those already navigating economic and regulatory hurdles.”
The CCIA provided more recently-unveiled resources coming from cannabis companies themselves: Embarc launched the United Cannabis Community Fire Relief Fund to “coalesce” industry efforts into one place, and The Artist Tree launched Painting a Path to Recovery: The Artist Tree Wildfire Fund.
Smoke Exposure and Wildfire Economic Impacts
In September 2023, researchers determined that smoke exposure from California wildfires led to “significant economic impacts” of the cannabis industry. Researchers noted damages taking place in Northern California in particular. They estimated that potential economic losses in 2020 and 2021 reached $1.44 billion and $970.04 million, respectively.
Some companies are ramping up insurance protections, and the fires tested the limitations of insurance companies. Depending on the license type, the DCC requires certain types of insurance coverage for cannabis businesses. For instance, the DCC requires cannabis retailers, testing labs, microbusinesses, and distributors to obtain general liability with a $1 million per-occurrence limit and a $2 million aggregate limit. Many cannabis businesses also get commercial property insurance, product liability insurance, and so on.
Cannabis companies, including growers who are impacted by smoke damage, are continuing to find new ways to reduce the impact of risks like yearly cyclical wildfires that continued to devastate California.
In 2020, outdoor cannabis farms in Northern California, particularly in the Emerald Triangle, were devastated. Fast-forward four years later, and Southern California has seen the brunt of the extent of damage wildfires can do. The still-burning wildfires—the Palisades Fire, Eaton Fire, Hughes Fire, Border 2 Fire, and Rosa Fire—continue to wreak havoc on the cannabis industry.
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