The lights are flickering out across Mendocino County

MENDOCINO CO., 4/24/26 — Up on the ridges above Willits, Steve Amato has been counting lights.

“These hills used to light up at night,” the president of the Mendocino Cannabis Alliance said last spring, describing what you could see from almost anywhere near U.S. 101 on a clear October evening. “These last two seasons we’ve seen fewer and fewer lights.”

On April 6, California’s Department of Cannabis Control announced the end of its provisional licensing program, calling it “a huge moment in time” that “reflects real evidence of our market maturing.” Nearly 8,000 annual commercial licenses had been issued statewide, including 6,419 provisional-to-annual conversions. From Sacramento, that tells a story of a stabilizing market.

From the ridge above Willits, the story is about fewer lights.

Which version describes the state of cannabis in Mendocino County depends on how far back you look — at least to 2000, when voters here wrote their own marijuana law, and to the years the state and federal governments spent trying to stop them.

The long boom

The wholesale farmgate price of a pound of cannabis held remarkably steady from the 1980s through the mid-2000s. The federal Campaign Against Marijuana Planting kept supply down and risk up. Between 1984 and 1995, according to reports compiled in the county’s own 2020 equity assessment, Mendocino ranked second among California counties in plants eradicated, accounting for roughly 26% of the state total.

Voters pushed back. In November 2000 they passed Measure G with 58% of the vote, legitimizing gardens of up to 25 plants and making the policing of such gardens the lowest priority for county law enforcement. What followed was a second green rush, much of it driven from outside the county. Sacramento piled on with SB 420 in 2003, which built a medical-cannabis collective framework so permissive that “card stacking” — combining patient recommendations to justify commercial-scale grows — turned the 25-plant garden into a legal on-ramp to far larger operations.

In 2008, Sheriff Tom Allman launched a voluntary zip-tie program: cultivators could buy numbered tags from the Sheriff’s Office, attach one to each flowering plant and carry clear legal status. By 2010 the Board of Supervisors had expanded it to 99 plants with a permit and inspection. Within two years the program had roughly 95 active applicants and had generated nearly $1 million — “enough to keep those jobs,” as reporter Mary Cuddehe put it in a 2013 “This American Life” episode, meaning the five deputies Allman had been told to lay off after the 2008 crash.

“I was very excited to have clear regulations,” Allman told “This American Life.” “I feel that overall it was a very healing time for the community.”

Healing ended in 2011. After a federal eradication sweep in the Mendocino National Forest, Allman briefed U.S. Attorney Melinda Haag’s office on the permit program. The feds rebuked him for running something “not consistent with federal law,” raided one of his most prominent permit-holders and forced the board to kill the 99-plant exemption. Supervisor John McCowen said he believed federal authorities shut it down specifically so other California counties would not copy it.

Through all of this, the price was collapsing. The Board of Supervisors commissioned an assessment of prices to obtain data for board programs in February 2020. That study, done by the California Center for Rural Policy, laid out the numbers: The price a farmer got at the farm before the product reached middlemen was $3,000 a pound in 2009; in 2011, under $2,000; 2014, $1,200; end of 2018, roughly $500. The 30-year boom propped up by prohibition ended in the same window — and the collapse happened before legalization, not because of it.

By the time Mendocino was invited to build a legal industry, the one it had built was already in free fall.

The licensing maze

California voters passed Proposition 64 in November 2016. Two weeks earlier, Mendocino voters had passed Measure AI by 63%, establishing a county cannabis business tax, and Measure AJ by a massive 87%, directing revenue toward enforcement, mental health, roads and emergency response.

What came next was eight years of administrative whiplash. The Cannabis Cultivation Ordinance took effect in April 2017. Between then and 2022 the permit program was shuffled through three administrative homes — Agriculture, Planning and Building Services, and finally the newly created Mendocino County Cannabis Department.

Meanwhile, the state rewrote its own regulatory structure three times in five years. The piece that mattered most for Mendocino — a programmatic environmental impact report without which almost no county cultivator could convert a provisional license to an annual one — was not certified by the California Department of Cannabis Control (DCC) until October 2024, 18 months after Mendocino Cannabis Alliance executive director Michael Katz had written publicly that the county’s legal industry faced “potential extinction.”

A month after the EIR was certified, the DCC announced it had begun transitioning 84 Mendocino cultivators to annual status. Cannabis Department senior program manager Sara McBurney said roughly 460 more still needed to convert before the Jan. 1, 2026, sunset. Of 535 active cultivation licenses in the county, 476 — about 89% — were still provisional.

The deadline passed. Any cultivator who had not completed the transition by Jan. 1 could no longer renew, no longer convert and had to cease operations. Reapplying from scratch — full CEQA compliance, full fees, no guarantee of approval — was theoretically possible. For a small grower already losing money at wholesale prices below cost of production, the pile of red tape amounted to a forced exit from the legal market.

The path the county chose

In 2019, the board adopted a Cannabis Economic Development Strategic Plan whose stated goal was “to improve the economic forecast for the county by generating 50% more revenue from cannabis over the next 5 years.” Over those five years, cannabis business tax revenue went the other direction — from a peak of $3.7 million in fiscal 2018-19 to a projected $1 million in 2025-26, barely enough to cover the operations of the Cannabis Department itself.

But it was the 10,000-square-foot canopy limit that became the thing Mendocino could not stop fighting about.

The 2017 ordinance allowed a grower to hold two county licenses on a single parcel — one cultivation license capped at 10,000 square feet of canopy and a second nursery license. For seven years everyone understood the flowering maximum to be 10,000 square feet. Then in April 2024 a staff review found nothing in the text restricting the second license to a nursery: in certain zones, a grower could flower 20,000 square feet. County Counsel Charlotte Scott told the board she stood by the analysis: “The words of the ordinance are what controlled that opinion.”

The board voted unanimously to draft a cap at 10,000, then failed 2-3 to adopt it. A motion to affirm 20,000 also failed. Both sides lost, and the status quo, the 20,000-square-foot reading held by default.

By the time the issue returned on April 8, 2025 — at an off-site meeting in the Wonacott Room of the Mendocino County Museum in Willits, grower country — the room held every fault line in the county’s cannabis story.

Board of Supervisors Chair John Haschak had gone back to a Laytonville cultivator who helped write the ordinance but since stopped growing. “She had no dog in the fight at this point,” Haschak said. “I said, `What is your opinion about this?’ And she said, ‘Of course it was 10,000 square feet. That was the intent, and that was what everyone agreed on.'”

Supervisor Madeline Cline said the damage in her district was already visible. “In Redwood Valley, where there are both rural residential and agriculture zoning, there is intense conflict between what’s happening with cannabis and residential homes in the makeup of neighborhoods. I cannot support having 20,000 as the limit.”

Supervisor Ted Williams took the other side and did not pretend the tradeoff was clean. “This county’s broke, right? We’re not generating enough revenue. We don’t have a plan for roads. They’re probably turning to gravel. So to turn down revenue because there’s an impact — it would be like banning the visitor economy.”

Then he put the sharpest question to the room: “Can the county, years after the fact, decide to pull the rug out when businesses have vested, they’ve put money in, they’ve planned their business around this, and then the rug is pulled out from under them?”

Steve Amato stood up and reframed the debate with numbers. He had called the Cannabis Department before the meeting and asked how many operators actually held the secondary license at issue. Twenty-five in the entire county. Of those, 22 were on non-resource land — a total of about five acres of canopy. How many had applied to convert that license to mature cultivation? Zero.

“We’re in a current climate where we’re losing cultivators and operations and businesses and tax revenue and dollars by the day,” Amato told the board. The fight, as he framed it, concerned five acres, and nobody had tried to use the disputed provision.

Ian Powell, a cultivator from Mendocino Grasslands, put it in first person. “My footprint’s already there, and it’s been there since 2018. I’m not expanding anything.” He was already growing 22,000 square feet — 10,000 flowering and 12,000 nursery. “If I wanted to put in an acre of strawberries, none of you would care. But because it’s cannabis, there’s a problem.”

The late Jim Shields, chairman of the Laytonville Municipal Advisory Council, put the rule-of-law objection on the record: “Such action gives the appearance of the cannabis ordinance administration being an insider’s game being played by staff and a self-selected few in the local cannabis industry.”

The cap failed again, 2-3. A month later the Willits Environmental Center filed a CEQA challenge. Whether the lawsuit or a promised ordinance rewrite will resolve the dispute — and whether any growers will be left to benefit — remained, a year later, open questions.

The southern flood

None of the above describes the market Mendocino flower sells into. That is a separate collapse, and it is mostly not Mendocino’s fault.

California’s legal cannabis market has been structurally oversupplied since at least 2021 — roughly 1,700 acres of licensed production against demand equivalent to about 1,000 acres. Wholesale prices fell from $2,000 per pound during the pandemic boom to roughly $1,200 by mid-2024, with outdoor flower selling for as little as $300.

Trade reporting specific to Mendocino put the local average at $1,377 in 2020 and $721 in 2024, a 48% drop. Most of the new capacity came from indoor and mixed-light operations in the Central Valley and Southern California, where capital was more available and purpose-built facilities could run year-round. Mendocino’s small sungrown farms found themselves competing on commodity price against buildings full of HPS lamps in San Bernardino County.

On July 1, 2025, the state’s cannabis excise tax rose from 15% to 19%. The board ratified a letter of support for Assembly Bill 564, which would repeal the increase — an acknowledgment by the supervisors that the tax burden is driving legal operators out of business.

The illegal market

While the legal industry shrinks, the illegal one has not.

On March 24, the Board of Supervisors ratified Sheriff Matt Kendall’s $4.5 million grant application to the state Board of State and Community Corrections under Proposition 64. The application deadline had forced Kendall to file before the meeting; the board was only asked to bless the submission after the fact. The staff memo did not call the grant an expansion. It called it a plan to rebuild the county’s cannabis enforcement unit — a verb that concedes the team charged with policing illicit cultivation was allowed to wither alongside the legal industry it was supposed to shield.

The grant would fund, through December 2031, two full-time detectives, a half-time deputy, a half-time criminal intelligence analyst, a full-time code enforcement officer, patrol deputy overtime and a fleet of drones, night-vision goggles, off-road vehicles and civil-citation software. It would reconstitute what Kendall has called a reinvented version of COMMET, the County of Mendocino Marijuana Enforcement Team. According to his briefing materials, an aerial survey found roughly 40% of previously identified illegal sites had shut down — but the remaining 60% had grown by about 30%. The net footprint of illegal cultivation was larger, not smaller.

The $4.5 million ask never came up for public discussion. It was on the consent calendar and approved in a single omnibus vote. The only consent item pulled for individual discussion was a museum lease agreement for Willits’ Roots of Motive Power. A $4.5 million bid to restart cannabis policing in the county that built its name on cannabis drew less airtime than an MOU about a vintage steam engine. Kendall was not at the meeting; his office said he was out of state attempting to secure additional funding.

During the same meeting’s budget workshop, Williams reminded his colleagues how long the legal side has been underwater. “I raised it many years ago when I got a copy of the tax revenue and found I think it was 88% hadn’t paid,” he said, referring to cannabis business tax delinquency. “It would be helpful if when staff brings it to us, if there are options to remedy the situation. If all we’re looking at is the problem, I think it might be a repeat of what we know.” Deputy CEO Tony Rakes confirmed updated numbers would come back April 7.

The picture is a county loosening the regulatory and tax burden on legal cultivators while going hat in hand to Sacramento for money to squeeze the illegal ones. The black-market operators pay nothing, carry no compliance costs and, until this grant lands, face almost no threat of seizure. The legal growers who testified at the April 2025 hearing had made the same point from the other side of the line: they were being squeezed between a system that taxed and constrained them and an illegal market that undercut them. Kendall’s grant, 11 months later, confirmed the scale of what they were competing against and the fact that the county could no longer police its own signature industry out of its own general fund.

The land

The collapse reached the tax rolls and the “for sale” signs at the same time.

Flow Cannabis Co., the Redwood Valley processor whose Flow Kana brand had been California’s top-selling flower in 2018 and 2019 and had raised $125 million from investors, laid off nearly its entire workforce in 2023. Drew Nickel, a licensed Mendocino County real estate agent, told the board at the April 2025 hearing that the damage was already quantifiable: “If you’re sitting on a 10-acre parcel in Mendocino County right now, your property values have already dropped at least 20% in value just from what we’re seeing going on with the cannabis.” A Bay Area magazine, he added, had hired a reporter to document the crash. “There isn’t any other county in the state where property values are dropping like this because of cannabis.”

Cannabis is not the only thing Mendocino is losing. In March, Ag Commissioner Angela Godwin told the board the county needs an abatement procedure for abandoned vineyards — a formal process for when a farmer walks away from a crop. The ordinance she is drafting would also cover abandoned cannabis grows.

The parallel runs deeper than coincidence. Both wine and cannabis in Mendocino are built on the promise that small heritage producers in a place with global name recognition can survive against commodity competition. Both have watched that promise collapse under the same forces: oversupply, falling wholesale prices, rising compliance costs and a consumer market that will not reliably pay a premium for origin.

“It’s exactly the same as grapes,” said Todd Schapmire, a commercial broker at W Real Estate in Ukiah. “The cost to do business has increased exponentially. And the revenue has not.”

Wine’s version is further along. California’s total crush hit a 30-year low in 2025. In Mendocino, growers pulled out 830 acres of vines in the 12 months ending August 2025. WarRoom Cellars, a consolidator producing 250,000 cases annually, bought the 92-year-old Parducci brand from Mendocino Wine Company in October 2024. Adolph Parducci’s winery, once producing 500,000 cases a year, was down to 50,000 when WarRoom picked it up. The grapes are still sourced from Mendocino. The brand is no longer Mendocino’s.

What took wine four decades — the cycle from craft origins to commodity oversupply to consolidation — cannabis accomplished in roughly eight years.

A vineyard that is no longer profitable to farm and a cannabis parcel whose license has lapsed both arrive at the same place: a rural property that has lost its productive value and its assessed value. “If you don’t have a prestigious appellation,” Schapmire said — talking about vineyards, but describing a dynamic cannabis growers now recognize — “people are looking at it as a liability, not an asset.” The land “is not selling, or it’s selling for nickels and dimes on the dollar.”

The county carries $30.6 million in uncollected taxes, penalties, interest and fees on defaulted properties. Its structural deficit is projected to widen through at least 2030. A state audit published in December found “strained finances and faulty oversight” and warned that balanced books depended on one-time revenues, optimistic assumptions and deferred obligations.

Older residents who for a generation covered their property taxes and propane bills with a small Measure G-era garden — 25 plants, hand-trimmed, sold to a local distributor — watched Proposition 64 reduce the legal home-grow limit to six plants, ban them from selling without a commercial license they cannot afford and collapse the wholesale price of what they could still grow by a factor of six.

The board’s own 2020 equity assessment put it plainly: “The paradox of cannabis legalization in California is that now that legalization is within reach, it is too late for the vast majority of small businesses and communitarian individuals historically involved in cannabis markets, because they have not accumulated capital during that time period.”

That was written six years ago. Nothing since has softened it.

The question

Mendocino has one piece of leverage left that a Central Valley mixed-light operation cannot replicate: place.

The Mendocino Appellations Project has been pushing since 2015 to get proposed cannabis appellations — Spyrock-Bell Springs, Covelo-Dos Rios, Long Valley-Branscomb-Leggett, Willits, Comptche, Ukiah Valley — into a state system modeled on wine’s American Viticultural Areas. On March 13, the California Department of Food and Agriculture released revised proposed regulations for the Cannabis Appellations Program and opened a public comment period. A hearing is scheduled for April 30 and the program could open for petitions by summer. That is the non-price play. It is the only one Mendocino has. It has not started yet.

The farms still running are mostly the ones that adapted — the ones that made it through the provisional-to-annual conversion, the ones with enough capital to absorb four years of falling prices while the state worked out its environmental review.

Sacramento calls this “market maturing.” From the ridge above Willits it describes something else: an industry that was supposed to backstop the county’s general fund, preserve a multigenerational rural economy and reward the people who spent 40 years making Mendocino synonymous with the product — an industry that has done none of those things.

The lights on the ridge used to run the county’s budget. They sustained a rural culture. For a lot of older neighbors, they paid the property tax. Most are off now. Whether the ones still burning can be kept lit is the question that matters.