Why I Wrote Left on Rancho
Twenty-five years in tech and nothing happened. Sure, there was innovation and the avant-garde projects. I worked with great (and marquee) clients. I formed long-lasting relationships. And I spent time in many of the global metropolises: Tokyo, Seoul, Singapore, Mumbai, Delhi, Frankfurt, London. But the germoglio, the bud for a story, never materialized.
Until I took a left on Rancho Road in Adelanto.
On a sabbatical from tech, I spent two years as CTO and Head of Operations for a cannabis startup in California. We made gummies. And what I learned, and observed, in those two years (2019 to 2021) was eye-opening, surreal, comical, and depressing.
Nearly 70% of the cannabis market in California is illegal.
Cannabis is still a Federal Schedule 1 drug, in the same category as heroin, LSD, and ecstasy, although now there are murmurings of “downgrading” it to Schedule 3.
There were three (3) State agencies regulating cannabis in California in 2019, trying to make themselves relevant by fighting over jurisdiction at the expense of legal players.
Taxes on cannabis are an economic disincentive: (1) a 35% excise tax (which does not include other taxes levied by the cities for cultivation, retail, distribution, and manufacturing); and (2) Federal Section 280E, which doubles a company’s effective income tax (one can’t deduct most business expenses, it’s from a racketeering law). The total effective tax burden? Close to 50%.
Cannabis prices dropped by 50% over an 18-month period due to the oversupply of cannabis, and because one can’t legally transport cannabis across state lines (it’s a Federal crime), what happens to all that weed?
California Proposition 64 legalized recreational cannabis and lowered the criminal penalty for illegal cannabis cultivation from a felony (punishable with jail time) to a $500 misdemeanor no matter how large the crop or haul. So to bring a felony case that might shut down an illegal operation, prosecutors must find other charges.
With Prop 64, the decision on where cannabis businesses can operate is determined by the cities and counties, it isn’t centralized. And it prohibits the counties that do not permit commercial cannabis grow, manufacturing, or distribution facilities from receiving state enforcement grants, so illegal entities set up shop in that county, because the local authorities have limited money and resources to police, raid or shut them down.
In Adelanto, multiple city council members have been arrested and put on trial (a former mayor was recently convicted) for taking bribes in exchange for cannabis dispensary licenses (and other crimes). Even the FBI was involved.
Instead of helping legal entities succeed, state bureaucrats inspect legal grow operations and legal manufacturers and legal dispensaries and make them spend hundreds of thousands of dollars on fees and improvements to their facilities to meet regulatory requirements.
When the recreational weed floodgates opened, the regulators didn’t think through the consequences. What strains are best for what affliction? Does weed have adverse interactions with other drugs, like anti-depressants, or anti-psychotics? Budtenders sell what they use, or what they’re paid to sell. While most of them are high. Doctors are in the dark because there is little to no funding for research on the side effects of mixing a federally illegal Schedule 1 drug with prescription and over the counter meds.
And, today’s weed is not what was smoked and ingested in the eighties and nineties: it has been bred to where it’s now up to five times more potent, in some cases more. The cerebral cortex doesn’t fully develop until the age of 25. So where in the past getting high may have moderately impacted young people long-term, today it’s going to debilitate the heavy users of the drug.
Why would anyone be in the legal cannabis business?
Left on Rancho, a contemporary noir set in the wild west of California cannabis, is the story of Andrew Eastman, a tech entrepreneur who in late 2019 drives to Adelanto to help a friend, a friend who needs help running a legal cannabis company—Kannawerks—while he raises money or finds a merger partner. Kannawerks can’t compete selling a commodity product in a commodity market with lax regulations and no enforcement against illegal products and state agencies that are more interested in making examples of legal cannabis companies as a way to make the agencies relevant, instead of going after and punishing illegal operators.
Maybe now ideas will spring forth from my days in tech and converge into a second novel. A corporate espionage caper that spans three continents? An Artificial Intelligence (AI) pharmaceutical ecosystem goes rogue, hijacks CRISPR, and triggers a global catastrophe (wait, didn’t we just… never mind)? A son returns to the land of his youth to bury his father and ponders the inevitability of death?
