Grown Rogue : Building Positive Partnerships Between the Cannabis Industry & Community

Grown Rogue hosted a panel discussion focusing on the community and cannabis in January. I attended via zoom and left the discussion fascinated by what I found out.

Grown Rogue International (CSE: GRIN | OTC: GRUSF) is a vertically integrated, multi-state Cannabis family of brands. Their story began more than 15 years ago when the founders, Obie and Sarah Strickler, started growing as part of the Oregon Medical Marijuana Program. 

Oregon Recreational Legalization in 2016 started a new chapter for the company. Grown Rogue built a best in class grow team, with over 75 years of combined experience, and carefully hired a diverse team of professionals, with a range of skillsets and backgrounds, from across the Rogue Valley. 

They went public in 2018 and continued expanding its foundation by focusing on efficiencies and best practices across the organization that would allow it to expand production and drive sales with enhanced profitability. Grown Rogue is now taking what they learned in the hypercompetitive Oregon market and selectively expanding its footprint by acquiring distressed and non-core assets across the rapidly growing US markets.

I learned about Grown Rogue a couple of years ago. 

Sarah gave me a fascinating tour of the indoor grow as part of the E2E (Entrepreneur to Entrepreneur) program where we tour local businesses and hear how they got started and what keeps the owners up at night.  I was impressed with how clean, organized and professional the operation was. 

I met Obie a year or so later and was again impressed by the business they built and with his industry leadership and passion. 

On January 19, 2022, Grown Rogue hosted an online panel discussion with local officials to discuss the challenges they are facing including but not limited to illegal pot and hot-hemp grows. 

Hot Hemp is grown as hemp (less regulated) but because the THC levels are too high (hemp should have less than 5% THC) it’s really being illegally grown and flooding the legal marijuana market. 

The panel was moderated by Lisa Manyon and was made up of the following leaders:

• Obie Strickler
  CEO of Grown Rogue
  
• Shandell Clark
  Jackson County Planning Division Manager 
  
• Nate Sickler
  Jackson County Sheriff
  
• Shavon Haynes
  Jackson County Water-master
  
• Jeff Golden
  Oregon State Senator
  
• Mike Odenthal
  Hemp Program Manager
  Oregon Department of Agriculture
  
• Dave Dotterrer
  Jackson County Commissioner 

Below is a loose transcription of the excellent panel discussion. The main take away for me was that Legitimate and Legal Cannabis growers are getting a bad rap because of all the illegal growers in the valley and that the county and state are working hard to find the resources to combat this issue. I left the discussion feeling good about how well everyone has been working together on the challenges they face. 

As an aside, our water rights were curtailed last year for several weeks on our mini farm in Ashland because of drought and an empty Emigrant Lake, but all of us blamed all the growers for sucking the lake dry. This panel discussion helped me understand how to frame my concerns for next year when we all meet to discuss the problem.

What’s your role and what are you doing in relationship to building better relationships and partnerships and making it a more positive experience with the cannabis industry and our community?

Obie:

“We’re a multi state cannabis operator, with facilities both in Oregon and Michigan. We operate about 200,000 square feet of cultivation between those two states.”

He went to to explain that he and his wife, Sarah, are both born and raised in Southern Oregon and they wanted to make sure they built a business that integrates well with the community and that they operate in a very positive and collaborative manner.

Obie is also the Chair of the Jackson County marijuana advisory committee and works closely with the sheriff and water master. 

Shandell Clark (Planning) : 

“I’m responsible for the overseeing the processing and permitting of cannabis grows, production and processing establishments.”

Sheriff Sickler :

“I have been the Jackson County sheriff for just over 5 years and have been in law enforcement since 1998.”

“Since measure 91 passed, we’ve seen a lot of challenges arise from the marijuana industry.”

Measure 91 legalized recreational marijuana for people ages 21 and older, allowing adults over this age to possess up to eight ounces of “dried” marijuana and up to four plants. Additionally, the measure tasked the Oregon Liquor Control Commission with regulating marijuana sales.

“My role on the marijuana advisory committee is really getting to know them, and understand what they’re dealing with, as people who are trying to do everything legal and follow the rules and try to advocate for their industry to be viewed as prosperous and legitimate in our community. “

“I think that for me as a sheriff and primarily, law enforcement perspective is trying to get rid of the bad actors, so to speak. So the the legal industry can do what they they would like to accomplish.”

Watermaster Haynes: 

“I work for the agency that issues water rights and water use permits. So anytime there’s anything that needs to be grown, they’re going to need a water, that’s where I come in. “

“Making sure that the cannabis growers that are licensed, have water rights and are getting it from the right sources and the right amounts. “

“I’m learning about the law enforcement process with cannabis cultivation. “

“One of the things that has happened recently, as a result of people being outspoken and sharing concern, and being very vocal, is my agency was just awarded some additional funding to get additional staff to be boots on the ground.”

Senator Jeff Golden:

“My focus since the summer has been to focus state attention and resources on our illegal grow situation, which is … devastating to the valley in so many ways. “

“We need boots on the ground. We need law enforcement. We need code enforcement. We need water enforcement. We need human rights help. “

“I think one of the really damaging aspects of the illegal grows is their impact on the relationship between community members in the legal industry, which most of us want to do everything we can to encourage and nurture.”

 “It can be a very important economic component. And it can save farmland too. But that’s not going to happen if the illegal grow situation can’t be controlled.”

“Essential to improving relationships, is getting a handle on the illegal growth problem. And that’ll that’ll be my focus going forward.”

“There’s a lot of proposals on the table… a couple of them have to do with water and water law and stiffening penalties for repeat offenders. Right now, there’s not enough deterrence for illicit water use. And some measures that have been proposed as an example would be requiring proof of water rights as a condition of getting a license. That’s one issue. There are several others.”

“You probably know there’s a moratorium on THC marijuana licenses”

“We’re asking the state, please, can we take a pause and try to get this under control? And that’s going to be a little controversial, not everybody is going to support that. “

Mike Odenthal (Or. Dept. Ag): 

“I am the head program manager for the Department of Agriculture. My role in that position is to license hemp growers and to verify that they are following the rules, and are properly licensed and producing hemp, not marijuana and to assist growers to be successful in their legal cultivation of hemp. “

“I’m building this program from the ground up as far as enforcement goes. “

“We’ve got to build our enforcement so that we get people in line and our community knows that we’re making an effort and we’ve got good people out there trying to grow hemp or recreational marijuana and not the illegal stuff.”

“When we say cannabis, we’re talking about both plants. I spent the bulk of my summer down in your area with Operation Table Rock. We had plenty of people that were definitely growing, what they knew was illegal. “

County Commissioner Dotterrer:

“From the standpoint of a county commissioner it is our role to highlight the issue and to make sure that the community understands what the issue really is. There is a lot of concern that not enough is being done about it “

“As a county commissioner, I will tell you that the other implication for this is just the whole concept of what this illegality and corruption can do to our community and what it means to this great community we live in, and the fact that, that this is essentially a cancer on our community. And it really has a dramatic impact across the board and all these other issues we’ve been talking about. But we just need to remember that we live in this great community and we need we want to keep it that way. “

“What we don’t want is this illegality and this corruption that enters in, when you start bringing in cartels and you start bringing in illegality and corruption.”

“I think we often need to step back and look at the larger community issues that are involved here.”

What is the biggest challenge that each of you are seeing in your respective areas when it comes to building partnerships and trying to really get everyone on the same page to do things right.

Obie : 

“The biggest challenge we face is twofold. One is the magnitude of the illegal production. It really puts a black eye on the legal industry. Which are those of us who are taking the right approach, going through licensing, working with the state, working with the county, working with the city, getting permits, paying our taxes, and workers comp benefits. We do all the things you do as a business owner and trying to integrate this industry, which has been kind of in the shadows historically and is now becoming mainstream. Did you know, across Canada, it’s fully legal. I think there’s 15 legalized states in the US with a bunch more than have legalized medical use of cannabis.”

“It doesn’t give people confidence that our industry can actually exist within more of a mainstream environment.“

“The second piece is that we don’t have deregulation yet.  In the US, there’s still a significant demand for product in other states where the price may be much higher. So a lot of the illegal activity is because they grow it here where the climates right and then they’ll ship it. It puts pressure in the markets we operate in, like Michigan, where you have an illegal product coming into the market. And simultaneously, you’re competing with additional product inside of Oregon, or you’re now competing with illegal operators and the consumer base. “

“They have a cheaper cost of production, because of all the things they don’t have to pay for… taxes, permitting, licensing.”

“The other thing I think it really impacts is one of the beauties of legalized cannabis, the testing and transparency. When they go and do these raids, you’re finding chemicals, and things that you should not be ingesting or consuming. It’s actually hurting the people who are trying to use this for health and wellness.“

Watermaster Haynes: 

“There’s only one of me in my district, there’s definitely is a need to have additional staff. “

“There’s a lot of water users and a lot of newer farmers who just don’t understand the rules and regulations regarding water use and irrigation rights. People will get a piece of exclusive farm use property, get a hemp registration, and think they can use water without even having water rights. “

“Legislation we’re looking at right now is looking at the enforcement capabilities of the Water Resource Department, because it’s not a very good deterrent to keep people from using water illegally. “

Shandell Clark (Planning) : 

“Of course, we are not enforcement based, we are actually the folks issuing the permits to allow the production or processing. But we hit those seasonal highs and we are just slammed. So that’s part of it, getting the permits out in a timely manner. “

“I think another big issue is that planning is kind of the strange animal where folks don’t often think about it. But yes you do need a planning permit to grow cannabis. So just getting that out there, so folks are aware as it may not occur to them, because they’re just simply farming. Come see us and get your permits for production and processing.”

Sherriff Sickler: 

“The illegal industry really casts a pretty big shadow over the legal industry. The ability for the relationships to grow is going to be to weed out those bad actors… the ones that are not following the rules, so to speak, because it really does paint a broad brush across the cannabis industry as a whole”

“When people see this illegal activity when they see law enforcement having to go out and eradicate grows, or when they see the violent crime associated with the black market or when they see the deputies too busy to handle the other calls for service because we’re running from grow, to grow, to grow, because of different things, livability issues, noise complaints, domestics, you name it, all manner of crimes, that takes away our ability to manage the other issues within the county with regards to the criminal justice system. So I think getting rid of the bad actors and letting people see that the industry can not consume all those additional resources when they’re operating legally, and that it can not impact the county as a whole. “

County Commissioner Dotterrer: 

“I’ve had the pleasure in the last month of going on a couple of rides with sheriff’s deputies, and it’s absolutely amazing to ride along with them and listen to all they’re talking about… this grow, or that grow, and all the information they’ve got and all the background, and how big this really is.”

“We have heard how complex this issue really is. And I think the big challenge for all of us is to synchronize our response, as we decide how we’re going to move forward to address this issue which is clearly a very complex issue for our community. “

Senator Jeff Golden: 

“Well, I’d really like to hear the answer to main challenges from more rural residents and farmers around the Rogue Valley, because they have been living with it every single day. “

“I believe in mounting a credible law enforcement response to this, which we haven’t had, until now. The message we’ve been sending is ‘come to southern Oregon and make 10s or hundreds of millions of dollars’, at the expense of the community with no risk really, for prosecution or punishment. That’s what we’re trying to change.”

“We’ve got amazing law enforcement in Jackson County, and now with more appropriate resources. On the other hand, we have some hardened folks who are not going to easily walk away from the kind of profits that they’ve been seeing. “

“I’m really interested and a little anxious about what happens now when we stand up a response. “

“Another clear challenge, I think it was Obie who underlined it, we have a structural problem, when we have states that have decriminalized or legalized recreational marijuana and a federal government that hasn’t. As long as that’s the case, roughly half the country is going to be a really lucrative black market for marijuana grown in Oregon and a few other states. Hence those huge profits are going to continue to draw some people who, how shall we say, aren’t highly concerned with the well being of the Rogue Valley community.

‘And then the other thing that occurs to me is finding the right balance between the need for reasonable law and order and private property rights.”

“Some people have have felt that over time law enforcement has had a real punitive attitude, and criminal justice about marijuana may use this as an excuse to go overboard and violate legitimate private property rights. “

“I see no evidence for that that in Jackson County, but there are a lot of counties in Oregon, and not all of their leadership is supportive of the legal cannabis industry. “

“I don’t think we have the balance right now. “

“It strikes me that law enforcement in the face of such out in the open, brazen violation of the law, has not been given the tools they need to respond in a timely way. “

“I think over time, it’s gonna be a challenge to find a balance that that meets our objectives.”

Sheriff Sickler: 

“Counties to the north of us and to the east and to the west, are now seeing an increase in the cartel activity and the hoop house is going up in their counties, and they’re going like, ‘Hey, what are we going to do?’, because they don’t have the resources either. “

“We’ve become a little bit desensitized in Jackson County and Josephine County, just because of the sheer amount, for so many years.“

“The Oregon State Sheriffs Association, which will predominantly be the agencies really responding to these grows started a workgroup to try to be uniform in our approach and we can offer guidance and some advice and/or training to these other sheriff’s offices and share what we’ve learned over the last five years with this cannabis industry. What works and what doesn’t and what’s effective and what’s not. “

“Being able to have a very uniform approach across the state is my hope. Other sheriffs will be able to follow the lead that Sheriff Daniel and I have been dealing with for many years here. “

“I’m hoping that will help alleviate some concerns within the cannabis industry as far as how things will be handled in different parts of the state.”

Senator Golden: 

“I have got to give a shout out to Sheriff Sickler here, because this is the balancing act that I’m talking about. “

“The sheriff gets calls every single day, pushing him to crack down, go out and just bust everybody around cannabis.”

“I think he has a really difficult job with really diverse views about what’s right. “

“He has worked really hard and with a variety of stakeholders to hold that balance and I really commend him for it.”

Obie Stickler: 

“Yeah, I was also going to add that we do have to recognize that this issue was seen through different eyes throughout the state of Oregon. “

“I do want to give a shout out to Senator Golden about working on recognizing that. Because this issue is moving to the Salem arena, and it’s going to be handled at a state level.” 

“Sheriff Sickler is on working on it with the other sheriffs to understand how much this really is a state issue. It’s really important that we view it from that perspective.”

Senator Golden: 

“There was a turning point in the state’s awareness about all this, in a legislative committee meeting, right before the short session when we passed the measure. “

“A whole bunch of people testified. “

“A 40 year old guy, who I didn’t recognize, got up and said, “I’m a third generation farmer. It’s how I make my whole living, and all of my water is surface water from a creek I have rights to. One day, the creek dried immediately and I walked upstream and ran into a very heavily armed guy around sandbags and his diversion was taking all the water out of the creek and I told him, “What are you doing? That’s our water”, and he said, “It’s not anymore. You just ran out of water for the rest of the year.” 

“And I’m thinking that creek could that have been in Jackson County.

When asked where he lived he says, “I live 25 minutes from downtown Portland, I live in Clackamas County” and I really saw some legislators sit up who hadn’t been paying attention.”

County Commissioner Dotterer: 

“This is not a just a Southern Oregon issue and problem. “

Mike Odenthal (Or. Dept. Ag):

“I think it all comes down to trust.” 

“Our industries have such a bad reputation, nobody believes them, whether we’ve got a really good legitimate legal grower, the neighbors don’t believe them. 

“My regulated hemp growers don’t believe me and I don’t believe most of them. 

“Until we can get some trust built, we’re not going to make headway. 

I think that’s my biggest challenge. They’ve got to start believing in me and believing I’m here to help them be successful as legitimate hemp growers. 

The neighbors have to start to trust me and I them, in that same effort, so that we can work together to build this industry up where it needs to go.

What’s the number one solution that each of you are working towards?

Obie: 

“These panels and talking to the community and giving them a chance to be heard. “

“From our perspective, we try to integrate as well as we can, via the advisory work I do on the Marijuana Advisory Committee. “

“Sarah, my wife and I, do tours all the time of our facilities to try and destigmatize and educate people on what cannabis is doing. “

“We joined the chamber. “

“Our sales director just joined Rotary.”

“Sarah’s at the MDA, the Medford Development Agency. “

“These are things that we can do to give back and show our commitment.“

“I’d like to see more cannabis companies doing it the right way, and contribute in that manner. “

“We’re a business. We’re in the community. We want to be a part of it.”

“That’s the biggest thing we’re doing.”

Shandell Clark (Planning) : 

“The best thing we can do is to continue to produce approvals that are very succinct and very well written so that code enforcement has the tools that they need to enforce.  The better the staff reports and approvals we write, the more information they have to go on. “

Sheriff Sickler: 

“Enforcement. That’s really the crux of this. A lot of the issue are byproducts of the illegal industry, meaning those who are doing things illegally. “

“We have the labor trafficking piece and the humanitarian piece, where workers are being treated poorly and kept in poor conditions.  “

“We have the criminal activity associated with the black market, and we have the water issues and the code enforcement issues. “

“If we get rid of the illegal industry, much of that will go away. “

“That would be what I would focus on. “

“Senator Golden talked a little bit about the funding for law enforcement, which we’re very thankful for. “

“Now, we just need to figure out how we sustain that ability to have a presence and be able to respond to these reports as they come forward in time and be able to really send a message that our county is not going to be a haven for this black market.”

Watermaster Haynes: 

“We’re going to be working toward is getting out in the field early and often, since we’re going to have some additional field staff, and that’s going to actually increase our presence 300% at locations, as they’re starting to use water and starting those education processes.” 

“Informing these individuals what needs to happen before they start growing something.”

“I’m hoping those processes will help weed out some of these bad actors.”

Senator Golden: 

“My piece of this puzzle ,for as long as I’m in the legislature, will be to continue to find ways to sustain the resources coming to local communities and local governments to do this work. “

Mike Odenthal  (Or. Dept. Ag):

“My plan and efforts right now are tightening enforcement. We want to make sure that everybody involved is abiding by what they’re supposed to do. 

County Commissioner Dotterer:

“I want to thank Senator Golden for bringing up the idea of the  sustainability issue here. Because from the county perspective, we want to make sure that whatever we’re doing, we can sustain the future to continue these projects.”

“The Senator is absolutely right, it makes no sense to do this on a short term basis at all.” 

What is the perspective on the marijuana reform slated for the spring of 2022? Specifically, the federal government’s role? 

Obie: 

“The first step been trying to get safe banking passed. It’s one of the challenges our industry faces. We don’t have access to general banking services. There’s still a lot of cash transactions. “

“We don’t have access to loans and traditional debt service. “

“It’s almost been like a political football. There’s has been a lot of excitement last year in the beginning part of 2021, when Biden was elected. Since then the regulatory changes really shifted.” 

“So there’s been some expectation that safe banking and some form of decriminalization may occur in the spring. “

“If that happens, I think it’s just a it’s another step in the overall process of getting to full deregulation. “

“You have to remember Southern Oregon is just a small entity within Oregon, and it’s hard to get resources. “

“It took a quite a tremendous effort from a lot of people on this panel and folks like Representative Pam Marsh, to get some money coming down here to help try and combat what’s been a pretty big problem.”

“So I’m not sure how much we’re gonna to influence what happens, at the federal level.”

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Find out more about Grown Rogue at grownrogue.com.