CANNAB IS FARMERS COU N CIL

C A N NA BI S FA R MI NG I N
S PO KAN E COU N TY
AN OVERVIEW OF LOCAL CANNABIS
FARMING, ITS ECONOMIC IMPACT, &
ZONING RECOMMENDATIONS

PR EPAR ED B Y
CRYSTAL OLIVER
JANUARY 1ST 2017

Contents
Executive Summary .................................................................. 3
Methodology & Findings ......................................................... 3
Farming Cannabis In Spokane County .................................. 6
Points Of Historical Importance ............................................ 6
A Look At The Numbers......................................................... 9
The Economic Impact Of The Current Industry .............. 10
Impact Of Ordinance 16-0915 .............................................. 10
Winners & Losers .................................................................... 11
Odors & Rural Living ............................................................. 12
Zoning Recommendations..................................................... 13
Conclusion ................................................................................ 14

Prepared by Crystal Oliver

On Behalf of Cannabis Farmers Council

E X E C U T I V E S U M M A RY
E X E C U T I V E S U M M A RY

A. Focus of this Report

This report was drafted to inform Spokane County Commissioners as they adopt zoning codes
that address the concerns of cannabis farmers neighbors without devastating existing cannabis
farmers livelihoods in Spokane County.
B. Overview of Findings
We identified that approximately 86% of existing cannabis farmers in Spokane County were
adversely impacted by Ordinance 16-0915 banning future outdoor cultivation permits. These farms
have collectively generated over $87 million in gross revenues, with $21-$30 million in labor and
wages being paid to approximately 3,234 employees throughout the county. If the existing ordinance
is left in place without modification it will prevent an estimated 1,764 jobs from being created and
will threaten the viability of cannabis farming in Spokane County.
C. Recommendations
We recommend that Spokane County Commissioners permit outdoor cultivation and increase
minimum parcel size to 5 acres for all tier sizes of farms that wish to cultivate outdoors located on
Large Tract Agriculture, Small Tract Agriculture, Forrest Lands, Rural-5, Rural Traditional, Urban
Reserve, Rural Conservation, and Mineral Lands.

FINDINGS
M E T H OD OL OG Y & F I N D I N G S

A. Methodology
This report includes data related to gross revenues generated by the local cannabis industry made
publicly available by the WSLCB (Washington State Liquor and Cannabis Board) and published at
502Data.com. Several Public Records Request were also submitted to Spokane County Auditor,
Spokane Planning Department, & Spokane County Commissioners offices in an effort to gather
additional parcel level data for cannabis farmers and odor complaints, however, we are still awaiting
the fulfillment of several of these requests. As a result we are primarily relying upon data collected
via online and telephone surveys of Cannabis Farmers Council Spokane constituents. Spokane
cannabis farmers were asked the following questions:

What tier is your farm?

Are you an indoor, outdoor, or mixed farm?

How many employees do you currently have, including part time as well as owners who
actively work on the farm?

How many acres is your farm located on?

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What zoning classification is the parcel your farm is located on?

How many farms are located on your parcel?

Is your business impacted by Ordinance 16-0915? If so how?

If your business is impacted, can you estimate the number of jobs that will not be
created as a result of this ordinance?

B. Findings
We received survey responses from 30 of the 147 cannabis farmers in Spokane County. This is
approximately 20% of existing cannabis farm operators in Spokane County.
Of those surveyed 20.8% were Tier 1 operators, 41.67% were Tier 2 operators, and 37.5% were
Tier 3 operators. Of the 147 licensed producers and processors in Spokane County approximately
25% are Tier 1 operators, 43% are Tier 2 operators, and 32% are Tier 3 operators. For this reason
these survey results are likely representative of Spokane cannabis farmers as a whole.
Of those surveyed 65% reported being currently engaged is outdoor production.

Cannabis Production
Indoor (Includes Fully Enclosed Green House)
Outdoor (Includes Hoop House)
Mixed

44%

35%

21%

The number of employees currently working for a cannabis farm surveyed totaled 504 ranging
from 1 to 325 employees per farm with 22 being the overall average. Considering there are 147
farms in Spokane County that calculates out to approximately 3,234 employees county wide.
The acreage of the parcel where survey respondents farms were currently sited ranged from less
than 1 acre to 160 acres. We did identify that 100% of those impacted by ordinance 16-0915 were
sited on parcels of 10 acres or more.
Zoning classification for existing parcels varied, with the majority being currently sited on Rural
Traditional and Industrial zoned parcels. Also of note was that many of the farms currently sited on
Industrial parcels reported being impacted by this ordinance even though outdoor production is not
permitted in industrial zoned parcels because they had plans to or had recently acquired rural parcels
to begin some outdoor cultivation.

Prepared by Crystal Oliver

On Behalf of Cannabis Farmers Council

Small Tract Agricultural (STA)

Large Tract Agriculture (LTA)
Low Density Residential Plus (LDR-P)
Other
Forest Lands (F)
Rural -5 (R-5)
Industrial
Rural Traditional (RT)

4.76%
4.76%
4.76%
9.20%
9.52%
9.52%
28.57%
28.57%
Zoning Classification

The number of farms sited on each parcel surveyed ranged from 1 to10, with an average of 1.73
farms per parcel.
Of those surveyed, 86% reported being adversely impacted by the ban on outdoor permits. At a
county level that would mean approximately 126 are impacted. When asked in what way they were
impacted the most common responses were as follows:

I had plans to expand an existing outdoor farm & understand I will now have to go
through a conditional use permit process.

I had plans to expand an existing indoor farm to include outdoor cultivation.

I have an existing outdoor farm on my property and had plans to site additional
outdoor farms on the same parcel.

I had plans to move my location to a new parcel and include outdoor cultivation.

I recently acquired property with plans to build an outdoor farm there.

When asked about the number of jobs that would not be created as a result of the ban on future
outdoor cultivation answers ranged from 1-35, totaling 234, the average being 14. Multiplying 14
jobs by 126 farms, comes to 1,764. Thus Ordinance 16-0915 will prevent an estimated 1,764 jobs
from being created in Spokane County in addition to threatening the overall viability of the cannabis
industry in Spokane and Washington State.

Prepared by Crystal Oliver

On Behalf of Cannabis Farmers Council

C A N N A B I S FA R M I N G OV E RV I E W
A NEW INDUSTRY COMES TO RURAL WASHINGTON

FA R M I N G C A N NA B I S I N S P O K A N E C O U N T Y

Spokane County is uniquely poised to develop land use and zoning regulations that protect and
promote jobs in one of the fastest growing industries in the United States.
The existing landscape of cannabis producers and processors in Spokane County consist of well over
100 small businesses and family farms, many of whom have lived in Spokane their entire lives. They
are made up of community-minded individuals who support small local businesses, as well as local
non-profits, the arts, and are employing a significant number of people.
Outdoor cannabis farming is the most viable form of cannabis production. It is the most costeffective and sustainable option and also has the lowest barrier to entry making it especially attractive
to small businesses, farms, and rural property owners.
P O I N T S O F H I S T OR I C A L I M P O RTA N C E

In November 2012, Washington State voters approved Initiative 502 which mandated the
legalization of cannabis possession and the establishment of a taxed and regulated cannabis market
by the WSLCB. Initiative 502 passed with 55.7% approval state wide and 52.5% approval in
Spokane County with 58% of Spokanes precincts voting to approve.
In December 2013, The WSLCB opened its limited licensing window to allow Washington State
residents to apply for licensure. The regulations put forth by the WSLCB in accordance with the
language of Initiative 502 were incredibly small business friendly. Ownership & financing were
limited to residents, the application and license fee were reasonable, vertical integration was
prohibited, and caps were put in place on the size of the cannabis farms and number of licenses an
individual could own. Because the regulations were small business friendly, many individuals and
families in rural Spokane immediately applied for licensure.
In April 2014, Spokane County Commissioners adopted an Emergency ordinance impacting
cannabis farmers throughout the county. Notice was given on Friday April 11th and the emergency
meeting was held on Monday April 14th 2014 and a highly restrictive ordinance was adopted. This
ordinance stated that production & processing could only take place on properties of 8 acres and
more and that buildings or property used for production or processing must be set back 300 feet
from rear and side property lines and 100 feet from front property lines. The result was a de-facto
ban on cannabis farming due to the small size of most prospective cannabis farmers parcels. The
Spokane cannabis farmers engaged with the County Commissioners, the Planning Commission, and
Planning Director to identify a compromise between the needs of farmers and neighbors.
In July 2014, WSLCB licensed cannabis retailers opened across the state and the market began to
grow, evolve, and mature at a rapid pace. While the cannabis farmers and entrepreneurs worked to
run profitable businesses in a new and often volatile market they were also tasked with keeping up
with the constantly evolving regulatory environment. Rules & legislation impacting the viability of
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On Behalf of Cannabis Farmers Council

their businesses were being created from scratch with little outreach to or knowledge of the industry.
This required cannabis farmers active engagement with the Department of Health, the WSLCB,
Washington State Department of Agriculture, Washington State Department of Revenue, The State
Building Code Council, Clean Air Agencies, Department of Ecology, and of course legislators.
Only in the last year have agencies and regulators begun to reach out to cannabis farmers directly and
establish workgroups and subcommittees so that regulations could be created in a more cooperative,
informed, & business friendly fashion.
January 27th 2015, Zoning Code Amendment 14-ZTA-03 was adopted by the Spokane County
Commissioners. This ordinance limited outdoor & indoor marijuana production to Small & Large
Tract Agricultural and Forest Lands, Rural-5, Rural Traditional, Urban Reserve, Rural Conservation,
& Mineral Lands. It required that they be licensed by the WSLCB, employ odor control measures if
cultivating indoors, and permitted Tier 1 producers to locate on 3-acre minimum parcels, and Tier 2
& Tier 3 producers were to be sited on 5-acre minimum parcels. The buildings and property being
used for production and processing were to be 100 feet from front property line, 50 feet from side &
rear property lines *, and 300 feet from primary residence of the adjoining parcel *.
*Can be reduced by 50% with signed waiver from adjacent property owner
In January of 2016, Spokane Clean Air Agency established a Marijuana Advisory Committee to
become more educated about the cannabis industry and identify how to regulate and collect fees
from the many cannabis farmers in Spokane County. The committee included indoor and outdoor
cannabis farmers, a representative from the Spokane Regional Health District, as well as various
individuals from the planning departments of Spokane City, County, and Valley, the WSLCB,
Spokane Police Department, a neighbor of one cannabis farm who had complained to Spokane
Clean Air frequently, as well as a former Spokane Planning Commission member who had expressed
strong opinions about the dangers of cannabis legalization prior to approving the cannabis zoning
recommendations. Many things were discussed, including whether or not cannabis cultivation was
an agricultural activity and thus cultivation on parcels of more than 5 acres, following generally
accepted farming practices, should be exempt from their oversight in accordance with the Clean Air
Act. Spokane Clean Airs executive director was opposed to this concept, though she did at one time
agree to remove the statement Cannabis is not Agriculture from one of the Committees founding
documents.
At this time there are at least three separate appeals taking place across Washington State
regarding the availability of this exemption to cannabis farmers from Clean Air Agencies oversight.
It is also noteworthy that the Department of Labor and Industries classifies employees of cannabis
farms as Agricultural Workers, the Washington State Department of Agriculture regulates their
pesticide usage, the State Building Codes treat cannabis cultivation like other farming endeavors, and
Spokane Countys currently adopted zoning code classifies marijuana production as an Agricultural
Use. There are a number of legislative efforts taking place this year, 2017, to further clarify the
status of cannabis as an agricultural product, which would align Washington policy with the policies
of Oregon, California, and Colorado protecting the future prospects of the Washington cannabis
farmers once interstate trade becomes available.
In November 2016, Spokane County Commissioners adopted an Emergency Ordinance 160915, with no notice, banning the issuance of permits for outdoor cultivation in Spokane County.
The primary reason for lack of notice appears to be a fear of a run on permits by cannabis farmers
seeking to protect their businesses future. This is despite the fact that the county commissioners
encouraged property owners to make a run on permits for wells after the Hirst decision came out in
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On Behalf of Cannabis Farmers Council

October. This action impacted the water rights and availability of water to existing water rights
holders and well owners throughout Spokane County.
In January 2017, the WSLCB will begin processing cannabis business acquisition applications,
allowing individuals and/or companies to own up to three production licenses via acquisition and
assumption of other businesses. This will result in consolidation of the industry as well as necessitate
growth of existing operators to remain competitive.

Prepared by Crystal Oliver

On Behalf of Cannabis Farmers Council

A L O OK A T T H E N U M B E R S

An ordinance preventing growth of outdoor cannabis farms in Spokane will severely impact the
viability of cannabis farming in Spokane County. It will significantly impact the small business
owners currently located here.
147

$87 Million

$21-30 Million

Licensed Cannabis Farmers and Processors call Spokane County home.

More than any other county in Washington.
Gross Revenues generated by Spokane County Cannabis Farmers. $3
million in 2014, $27 million in 2015, and $57 million in 2016, as of
December 1st 2016.
Labor & Wages Paid, assuming conservatively 25%-35% gross revenues
go to labor cost.

$13 Million

Retail Tax generated in Spokane County via Cannabis Sales since July
2014.

$44 Million

Excise Tax revenue collected in Spokane County since July 2014.

(Source https://www.502data.com/counties)

$2.4 Billion

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Cannabis sales projected in Washington State by 2020 by Arcview

Market Research Firm.
Average number of individuals employed at a Licensed Cannabis
Farm in Spokane County. (Based on Cannabis Farmers Councils survey
results)

3,234

Estimated number of employees working directly for a cannabis farm in

Spokane County.

100%

Number of Cannabis Farmers surveyed who are negatively impacted by this

ordinance on parcels of 10 acres or greater. (Based on Cannabis Farmers
Councils survey results)

1,764

Estimated number of new jobs that wont be created as a result of a ban

on Outdoor permits.

Prepared by Crystal Oliver

On Behalf of Cannabis Farmers Council

C A N N A B I S FA R M I N G S
E C O N O M I C I M PAC T
INVESTMENT, SPENDING, AND JOB CREATION

T H E E C O N O M I C I M PA C T OF T H E C U R R E N T I N D U S T RY

$87 Million in Gross Revenues is not possible without significant investment and spending
(source https://www.502data.com/counties)
Assuming conservatively 25%-35% of gross revenues go to labor cost would mean $21-30 million in
labor and wages alone have been paid in Spokane County.
Many of the cannabis farmers in Spokane County subscribe to the philosophy of buying local from
other small businesses and Cannabis Farmers Councils constituents report observing many of the
small businesses they work with growing alongside their own. Operational costs for a cannabis farm
range from 30% to 65% of gross revenues which would mean an estimated $26 million to $56
million in spending overall by Spokane County cannabis farmers.

Investment Expenses include: Property acquisition, rent and leases, construction and
remodeling, equipment purchases and installation, permitting, inspections, consulting and
others. Start-up costs of a cannabis farm range from $25,000 to several million dollars in
Spokane County depending on size.

Operational Spending includes: Fertilizers, soils, electricity, water, labeling, packaging,

advertising, consulting, and professional business services to name a few.

Other businesses and professionals benefiting from the cannabis industry include:
Numerica Credit Union, UPS, Accountants, Bookkeepers, Attorneys, Electricians,
Contractors, Fencing Companies, Security Companies, Farm and Feed Stores, Website
Designers, Digital Marketing, Marijuana Transportation Companies, Cannabis Testing Labs,
Printing Companies, Packaging Companies, Hardware Stores, Hydroponic and Garden
Supply Stores, Real Estate Agents, Title Companies, Soil and Compost Companies, , Interior
Designers, Engineers, Flooring Companies, Greenhouse Distributors, Hoop-house
Distributors, Car Dealerships, Office Supply Stores, Plumbers, and more.
I M PA C T O F O R D I N A N C E 1 6 - 0 9 1 5
BA N N I N G A L L F U T U R E P E R M I T S F OR OU T D O OR C U LT I VA T I ON

Based on the survey of the Cannabis Farmers Councils Spokane constituents it is evident that this
action impacts nearly all existing cannabis farmers in Spokane County.

86% of those surveyed reported being adversely impacted by the most recently adopted
ordinance, most citing an impact to expansion of outdoor cultivation, relocation plans, or
citing of additional outdoor farms on their parcel.
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On Behalf of Cannabis Farmers Council

14 jobs was the average number of jobs per farm that would not be created as a result of a
ban on new outdoor cultivation permits based on survey results. (Multiplying 14 jobs by 126
farms, comes to 1,764. Thus Ordinance 16-0915 will prevent an estimated 1,764 jobs from
being created in Spokane County)

Outdoor cannabis farming is emerging as the preferred and most viable method of cultivation to
meet the demands of the maturing legal cannabis market in Washington. A ban on outdoor
cultivation permits prevents business owners from being able to relocate to larger, possibly more
appropriate parcels, and prevents indoor operators from making their business more viable through
expansion into outdoor cultivation.
Several of our constituents have recently acquired property to relocate and expand their cannabis
farm and cant grow outdoors as they had planned with this ordinance in place.
Local hoop house distributors will also be impacted if Ordinance 16-0915 remains in place since a
ban on outdoor cultivation would also ban farmers from expanding operations to include hoop
houses.
Indoor cultivation requires extensive infrastructure investments to even bring power out to a rural
parcel, these expenses generally start at $50,000 and go up. With limited access to capital due to the
current status of cannabis at a Federal level this sort of investment is out of reach for most small
business owners.
Indoor cultivation has a greater carbon impact than outdoor cultivation. The Northwest Power and
Conservation Council estimated in 2014 that marijuana operations could grow Washington electricity
demand between 60 MW and 160 MW over the next 20 years and Regional demand in Idaho,
Montana, Oregon, and Washington could reach almost 250 MW by 2035. In a time when our
Governor has asked regulators and legislators to be mindful of the carbon impact of their regulations
and legislation, an ordinance that forces significant energy consumption increases when a perfectly
good alternative exists (the sun) seems out of place.
Not only does the construction of a building or facility for indoor cannabis cultivation impact the
future availability of that land for other types of agriculture activities, indoor cultivation generates
more waste including, light bulbs, spent soil, plastic pots, plastic fertilizer containers, etc.
WINNERS & L OSERS

There are winners and losers whenever a regulation is passed.

Ordinance 16-0915 banning outdoor cultivation is no different.
Some of the winners include:

Owners of Industrial and Warehouse properties in Spokane County, who have at this point
already increased their rental and lease rates considerably.

Large businesses and out-of-state investors who have access to the significant capital
required to build out indoor facilities.

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On Behalf of Cannabis Farmers Council

The local energy companies, including Avista and Inland Power who will benefit from
increased demand and infrastructure.

Light bulb and lighting fixture companies.

Some of the losers include:

Small, locally owned cannabis farmers.

Prospective and current employees of cannabis farms.

Those employed by the many ancillary businesses these farms support.

The environment and future viability of cannabis farming in Spokane Washington.

Other States including Oregon and most importantly California are passing regulations to encourage
outdoor cannabis cultivation, most notably Humboldt County, Californias cannabis breadbasket,
recently adopted Measure S with a 70% approval rate; which will tax cultivation at $1.00 per sq. ft for
outdoor, $2 for mixed light, and $3 for indoor. Spokane County should adopt land use policies that
encourage outdoor cultivation, rather than discourage it to promote long term viability of the
Washington cannabis industry.

ODOR & RURAL LIVING

O D O R S & RU R A L L I V I N G

We understand that the primary driver behind the adoption of emergency ordinance 16-0915 is
related to odor complaints.
Odors are a part of rural living. While we appreciate that some have moved to rural and agricultural
lands to enjoy a view, many choose to live on rural and agricultural parcels so that they may earn a
living.
Spokane County has published A Guide to Rural Living which states
Rural character and living in the country may appear charming on a weekend drive, but it can
be quite different if youre unprepared. Farms and ranches are wonderful places, but livestock
can produce odors, and agricultural activities generate dust from tilling and harvesting
An important component of growth management planning in Washington includes the protection of
agricultural viability. Attempting to stifle the activities of a new agricultural industry in rural
Washington through the application of unfair and overly prohibitive land use ordinances establishes
an alarming precedence for stripping away the rights of all farmers to earn a living on their land.

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Z O N I N G R E C O M M E N DA T I O N S
Z O N I N G R E C O M M E N DA T I O N S

The Cannabis Farmers Council opposes the adoption and renewal of Emergency Ordinance 16-0915
banning permits on outdoor cultivation.
We believe it is critical to the health and well-being of the cannabis industry in Spokane that existing
cannabis farmers are permitted to expand as they see fit to ensure their continued viability, including
allowing them to cultivate outdoors.
In the future we encourage the County Commissioners to engage in stakeholder outreach prior to
adopting ordinances impacting cannabis farmers.
We suggest that the following modifications be made to existing zoning code:

Permit outdoor cultivation.

Increase minimum parcel size to 5 acres for all tier sizes of farms wishing to cultivate
outdoors.

Spokane Zoning Code Standards for indoor and outdoor Marijuana production in Large
Tract Agriculture, Small Tract Agriculture, Forrest Lands, Rural-5, Rural Traditional,
Urban Reserve, Rural Conservation, and Mineral Lands.
a. The use(s) must meet all licensing requirements of the Washington State Liquor Control
Board.
b. The use(s) shall employ odor control measures as necessary to comply with SRCCA
Regulation 1, Section 6.04 Emission of Air Contaminant: Detriment to Person or Property.
Such odor control measures may include, but are not limited to the following: use of carbon
adsorption media or other controls at all exhaust air discharge points, use of vertical exhaust
vents or stacks, and/or completely enclosing the operation and recirculating ventilation air within
the enclosure.
c. Outdoor or indoor production or limited processing facility, temporary growing structures,
greenhouse, or structures must be located a minimum of 100 feet from any front property line;
except that the 100 foot setback shall not apply to structures existing on the property at the time
of adoption of this ordinance; 50 feet from any side, flanking, or rear property line; and 300 feet
from any primary residence on an adjacent property. The distance from any primary residence on
an adjacent property and/or from the side, rear, or flanking property line can be reduced by up
to fifty percent (50%) if the adjacent property owner signs a waiver. Provided, however, that at
no time shall the parcel, lot or tract for an indoor Tier 1 marijuana producer Tier 1 permit be
less than three (3) acres and for Tier 1 outdoor, Tier 2 and/or Tier 3 permit be less than five (5)
acres in size. The terminology temporary growing structure means a structure that has the
sides and roof covered with polyethylene, polyvinyl or similar flexible synthetic material and is
used to provide plants with either frost protection or increased heat retention.

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CONCLUSION
PROTECT OUTDOOR CULT IVATION
PROTECT SMALL BUSINE SSES
PROTECT JOBS IN SPOK ANE COUNTY

C ON C L U S I O N

Spokane should not be adopting ordinances that will disadvantage the local cannabis industry so
significantly given the likelihood of interstate trade in the years to come. The future of viable
cannabis farming is undoubtedly outdoors.
It is our sincere hope that the Spokane County Commissioners will opt to protect outdoor
cultivation, protect small businesses and farms, and most importantly support job creation in
Spokane County.

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On Behalf of Cannabis Farmers Council