July 2025

THE OUTDOORS ISSUE

Blunt Economics Why experts are questioning the viability of the legal North Bay cannabis industry

Inside: Curse of Olompali • SSU 2.0 • Violetto Jarvis Estate • Kayak tours • Waymo Revisiting Napa cab

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August 1st the Grand Opening Thrilling rides and endless fun for adventure seekers! The adrenaline will be pumping with a PRCA Rodeo and the roar of the Monster Trucks Special events celebrating our furry companions and an “adop-a-pet” program will be held every day! Agricultural Showcases • Live Entertainment • Delicious Fair Food Community Connection Hot Dogs and Cool Cats: A Tail-Wagging Good Time at the Sonoma County Fair 2025! Santa Rosa, CA • August 1st–10th, 2025 Get ready for paws-itively amazing experience!

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July 2025 • Volume 50 • Number 8 CONTENTS

50 YEARS OF BUSINESS INTELLIGENCE

LEAD STORY 22 State of Cannabis Janis Mara

FEATURE STORIES 18 Sonoma State 2.0 Robert Eyler A look at falling enrollment at Sonoma State and what can be done to right the ship 20 Trouble the Water Jason Walsh Stinson Beach issues a plan of action for sea-level rise 28 Gleam Streams Janet Perry Bioluminescent kayak tours will light up your summer! 38 Hidden North Bay Jason Walsh Plan a daytrip to some of the more mysterious destinations in the area

Industry watchdogs are skeptical about the future for local, legal cannabis

WORK/LIFE 15 Spending 16 Currency

July 2025

NorthBaybiz 5

DEPARTMENTS 12 The 707

COLUMNS 11

Editor's Note Jason Walsh SSU enters its rebuild

The latest news from Sonoma and Napa counties

The 415 The latest news from Marin County

Only In Marin Bill Meagher Sausalito considers allowing chain stores in its downtown

The Month In Numbers A look at the key figures shaping life in the North Bay Great Tastes Alexandra Russell Jarvis Estate Winery, discover the cool wine caves in Napa

Napa Insider Christina Julian How Waymo beat Tesla to the streets

Tech Talk Michael E. Duffy Tea and scones? A visit to Ian’s Bakeshop and Napa Valley Tea Company

Dine Wise Jason Walsh Violetto, the best of both worlds in St. Helena

Vine Wise Adam Lee Revisiting Napa Valley cabs

What’s Happening Upcoming North Bay events

In the Kitchen John Ash Grilled brine shrimp with pickled corn

On the Move Comings and goings in the business community

Biz Scene Celebrating the Best of the North Bay!

Beyond the Boardroom Rosie Padilla Paula Hardin, general manager Airport Health Club

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6 NorthBaybiz

July 2025

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Editor's Note

Sonoma State enters its rebuild

By Jason Walsh

T here’s a this past month at Sonoma State University, which learned in June it would receive $45 million in unexpected funds as part of the new state budget (see The 707, p. 12). You’ll recall from the 1946 Frank Capra scene in It’s A Wonderful Life that encapsulates classic: Community do-gooder George Bailey (James Stewart) was at the end of his rope. Ripped off by

an assumption the pandemic is still the root cause is a fool’s errand. Enrollment numbers have dropped each of the five years since lockdown. Status quo is not an option. Just as George Bailey banking on the occasional basket of petty cash from his friends and hoping Mr. Potter

retires wasn’t a viable option. If you’ve watched the movie and later googled “what is a building and loan,” it’s because that business model no longer exists. Status quo wasn’t an option in Bedford Falls, and it’s not an option in Rohnert Park. Whether SSU’s plan forward will work is not only debatable but, at this point, unknowable—details about which programs might be spared by the new state funds and what concentrations will become the “brand” of the university (Nursing? Hospitality?) haven’t been finalized. But as Eyler makes clear: The university needs to “start doing things no other CSU campus is doing, and monopolize that position once established.” It’s similar to a professional sports team during a rebuild. After a few losing seasons in a row, management sheds high salaries and longtime team favorites to head in a new direction. It’s painful and unpopular at first, but typically necessary—and usually should have been done earlier. What we’re seeing is SSU’s rebuild. Whether winning seasons are ahead will depend on decisions being considered by SSU and CSU leadership right now . g

George Bailey gets a sudden infusion of cash from the Bedford Falls community in ‘It’s A Wonderful Life.’

greedy banker Mr. Potter, George was heavily in debt and facing an existential crisis about whether his very life was worth the hassle. Just when all seemed lost, a pool of public funds is presented for his disposal—the pre-GoFundMe scene where everyone in Bedford Falls runs in with handfuls of spare cash—and he’s given a reprieve from shutting down many staple operations of his financially struggling “building and loan” nonprofit. Cue: “Auld Lang Syne,” tears, etc. While SSU’s sudden windfall didn’t end with quite the level of denouement as the film—dude Clarence literally becomes an angel, after all!—it will go a long way and then some toward narrowing the $23 million budget gap that led to the university announcing in January plans to stop offering several core majors, eliminate some staff and end its Division II athletics program. But even if some or portions of those cuts are staid, these one-time funds won’t solve the endemic problem: Those programs aren’t self- sustaining; they aren’t attracting sufficient student participation. As Robert Eyler, respected economics professor at SSU, points out on page 18, enrollment at Sonoma State hasn’t recovered from its pre-COVID numbers—and waiting for a course correction under

July 2025

NorthBaybiz 11

The 707

SSU to receive $45M windfall Sonoma State is changing budget outlooks faster than college freshmen change majors. The struggling state university, which announced $24 million in budget cuts last January, is now set to receive $45 million in one-time funds from the state. The bonanza will support at least some of the athletics, degree programs and staff positions on the chopping block since the controversial cuts were announced. Portions of the funds will also be focused toward construction of a new career center, expanding the nursing program, launching a student recruitment campaign and creating new degree options for students. The announcement did not specify which existing programs and positions would be spared from elimination, though some will go toward “helping fund Sonoma State’s athletics program over the next few years.” The funds are part of what’s being called the Sonoma State Commitment initiative, announced June 24 by state Senators Mike McGuire and Christopher Cabaldon, and Assemblymembers Cecilia Aguiar-Curry, Damon Connolly and Chris Rogers.— JW

Work begins on 75-unit affordable housing project in Roseland Ground broke this spring on the Casa Roseland project, a 75-unit affordable housing development in the Roseland area of Santa Rosa. The apartments—a mix of one-, two-, and three-bedroom units—will serve families with incomes of up to 30 to 60% of Area Median Income, which is currently $29,050 to $82,980, depending on household size, according to the county. District 3 Supervisor Chris Coursey, who represents the Roseland area, described the project as an important step in mitigating the area’s affordable housing crisis. “This investment will pay dividends many times over,” Coursey said at the groundbreaking. Casa Roseland is part of Tierra de Rosas, a community-led effort to improve the Roseland neighborhood’s economy, housing opportunity and overall community wellbeing. MidPen Housing, a Foster City-based affordable housing developer with several Sonoma County projects under its belt, was selected by the Sonoma County Community Development Commission to develop Tierra de Rosas which, in addition to affordable housing, will include market-rate housing, a civic-use building and a 10,000-square-foot mercado. Casa Roseland will include a community room, learning center, teen room, bike storage and laundry facilities, as well as approximately 1,600 square feet of outdoor space including a landscaped barbecue area and children’s play area. The architect is Van Meter Williams Pollack LLP and the general contractor is Devcon Construction, Inc. Construction is expected to be complete in summer 2026.— JW

Sutter Health opens new Rohnert Park care center Sutter Health opened its new 17,000-square-foot care center in Rohnert Park this spring. The 6000 State Farm Drive campus includes 16 primary care exam rooms, eight for urgent care and two procedure rooms, staffed by seven primary care physicians, along with advanced practice clinicians, nurses and support staff, according to a Sutter announcement. Its new campus on State Farm Drive was formerly a Pac Bell call center. Sutter invested nearly $17 million in creating the new facility. The eight-month project was led by Layton Construction. Family medicine providers from Sutter’s 5300 Snyder Lane location have already transitioned to the new campus. The Rohnert Park Care Center is one of the first in a plan to open 19 urgent care locations across Northern California by 2028, the medical group said. Dr. Michael Magnotti, CEO of Sutter Medical Group of the Redwoods, says investing in Rohnert Park allows Sutter to offer greater access to its health care services in the North Bay. “Having imaging and lab services on-site is a big benefit, as it means faster results for both patients and clinicians, helping them make informed decisions more quickly,” he said in the announcement. Sutter’s next-closest location is Sutter Santa Rosa Regional Hospital at 30 Mark West Springs Road. The Rohnert Park Care Center also offers osteopathic manipulative treatment (OMT), X-ray, CT and ultrasound imaging and on- site lab testing. Its urgent care will allow for walk-in treatment and hold extended hours and weekend availability.— NBb

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July 2025

The 415

Relief for Highway 37? The commute between Marin and Solano counties could see some light at the end of the traffic-jammed tunnel, as state transportation officials lobby for $73 million in funding to widen Highway 37. California Transportation Commission staff is recommending the project receive grant funds as part of the statewide $810.5 million Trade Corridor Enhancement Program. The Highway 37 work would widen a 10-mile stretch from Sears Point to Mare Island—a thoroughfare that sees almost daily gridlock. Highway 37 between Marin and Vallejo sees nearly 40,000 daily, according to the Marin Independent Journal. The highway is a hot topic among transportation watchdogs—as its situation abutting the San Pablo Bay will likely see it under water in the coming decades if expected sea-level rise comes to fruition.—JW

Marin DA part of 275k settlement with ‘fraudulent’ magazine Attention local magazine readers: If Pacific magazine sends you a bill—don’t pay! The Marin County District Attorney’s Office recently was awarded part of a $275,000 settlement in a “fraudulent billing practices” case against the San Marcos-based Pacific Magazine Billing, which was accused of violating false advertising and unfair competition laws. “The company’s business model was a scheme built on deception,” said Marin County Deputy District Attorney Michael Wear in an announcement of the settlement. “Consumers believed they were paying legitimate bills, when in fact they were being scammed.” Under the settlement terms, Pacific Magazine Billing is also permanently banned from sending solicitations for magazine subscriptions and from mailing solicitations that resemble bills or invoices in any business capacity. After receiving complaints from consumers throughout the state, several District Attorneys’ offices, including those in Sonoma County and San Francisco, and the California Department of Justice, launched a joint investigation into Pacific magazine in late 2022. The investigation uncovered that, from 2016 through 2022, the company mailed tens of millions of deceptive solicitations to households across the country. These mailers were designed to look like legitimate bills for existing magazine subscriptions—but, in fact, they were intended to trick unsuspecting consumers into sending payments for subscriptions they had not ordered or intended to renew. Thousands of consumers were misled, according to the Marin DA.— JW

Oak-infesting insect found in Novato An invasive beetle has penetrated the Marin County limits—and local agricultural watchdogs are on high alert. The Mediterranean oak borer, an invasive insect that primarily feeds on white oaks, was recently detected in Novato. The Marin County Agricultural Commissioner is urging professional arborists and the public to keep an eye out for evidence of the invasive tree pest, which is native to Europe, the Middle East and North Africa. The ambrosia beetle species is small—approximately 3 millimeters—and bores tunnels into stressed trees, specifically oaks. The beetles initially attack branches in the crown of a tree, killing limbs as the infestation grows. Eventually, the infestation spreads to the trunk and ultimately kills the tree. The insect was first detected in Napa County in 2019 and has since been found in nine counties. The beetles carry and grow fungus in the galleries they bore; then they feed off the fungus, so they can live and reproduce within a tree for generations. Typically, the female beetles fly, but the males don’t. Joe Deviney, Marin’s agricultural commissioner, said now that the oak borer is here, it’s likely here to stay. “Education about the beetle is important, but unfortunately it can’t be eradicated and it’s becoming more widespread in our area,” Deviney said in a press announcement about the insect. “It was only a matter of time for the presence of this invasive pest to be confirmed in our county.” Homeowners are urged to monitor tree crowns and, if they see a decline in leaf growth in one or more branches or observe other symptoms of an infestation, are encouraged to seek expert evaluation from a certified arborist. Learn more at mobpc.org. — JW

July 2025

NorthBaybiz 13

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Work Life Spending

Eating a hole in your wallet

Food habits top survey of wasteful spending

A mericans are eating website, which asked more than 2,000 people to name their wasteful spending habits. Turns out “dollar tacos” are aptly named, as the topped rank love of spendthrifts is “frequently eating out,” which 38% of respondents copped to. But eating out was merely the tip of the iceberg lettuce—third on the list was “frequently buying convenience foods and beverages.” Seems, for many, places like Burger King are home of the whopper to themselves into debt. That was the conclusion from a recent survey conducted by the Motley Fool financial By Jason Walsh

your bank account. Continuing the eating-habits theme, the fourth most common practice among wastrels was “frequently discarding leftovers or expired food.” (What, no one got the recipe for Grandma’s Hodge Podge Casserole?) And at No. 8, “ordering from food-delivery apps.” Wealth blogger Ramit Sethi told the website it’s no surprise that hunger pangs hold such a sway over careless consumers. “It’s about convenience, impulsivity, reward and more,” he said. Spending on food is also hard to track, making its effect on one’s bank account less noticeable. Still, Sethi stressed, food

“is the biggest category where there’s money to free up and redirect into something that matters more.” Other wasteful habits on the list include impulse buying online at No. 2; paying for unused streaming services at No. 5; and purchasing new clothes despite already owning something similar at No. 6. Lottery tickets and tobacco products were 7 and 11, respectively. In all, respondents cited 36 different wasteful spending habits of which at least 3% of them were guilty, which makes No. 15—paying high interest due to debt—hardly much of a surprise.

Wasteful Spending Triggers What makes people spend wastefully? According to the Motley Fool survey, different age groups were driven to waste their money by different triggers. Interestingly, online advertising is highly effective on all demographics. TRIGGERS GEN Z MILLENNIAL GEN X BABY BOOMERS TOTAL Online ads 62% 61% 59% 49% 58% Sales/discounts 53% 60% 54% 63% 57% Subscription service 31% 32% 21% 16% 25% Emotional shopping 41% 28% 13% 4% 21% Peer influence 24% 23% 9% 6% 15%

July 2025

NorthBaybiz 15

Work Life Currency

The Penny Drops: U.S. to phase out under- appreciated currency

Pennywise Here are a few invaluable facts about the penny • The coin’s official name is ‘cent’ or ‘one cent piece’ • The term ‘penny’ derived from the British coin of the same name • The first U.S. cent was produced in 1787 • It’s longtime half-sibling the half-cent was discontinued in 1857 • The cent has featured the profile of Abraham Lincoln since 1909 • Pennies are copper plated, and made of 95% zinc • A 1943 penny once sold for $1.7 million. Only 40 of these 1943 copper-alloy cent pieces were ever produced—likely by accident when copper-alloy blanks were mistakenly left in the presses

A mericans won’t have pennies to kick around anymore. The oft- maligned coinage that’s barely worth a child picking up off the ground these days is By Jason Walsh

days feeding Coinstar machines than cash registers. There are currently about 114 billion pennies in circulation. The Treasury expects to save about $56 million annually by ending penny production. It would take a vote by U.S. Congress to make the end of the cent permanent; various bipartisan

on its way out. The U.S. Mint is issuing one final

bills have been introduced over the years, but none

batch of the copper- plated coins before

ending production permanently. The Trump administration ordered the end of the cent,

have successfully killed the coin just yet. If Congress were to legislate the end of the

citing its cost to produce in relation to its spending value. Each penny costs almost 4 cents to make, according to the U.S. Mint. (A bargain compared to the nickel, which costs nearly 14 cents.) The Treasury Department also says the cent is underutilized—seen more these

penny, it would need to include language in the law about how companies would adjust their pricing—without that, simply ending the cent coin would create a huge demand for nickels, which are even more expensive to produce.

16 NorthBaybiz

July 2025

The Month In Numbers

Sonoma County For sale, as is

$12.8 million

Price of a new 5-bedroom, 6-bathroom 5,200-square-foot home that came on the market in June in Kenwood, the highest-listed asking price on record in the Sonoma Valley town. The property includes 65-foot saltwater pool and

spa, a full outdoor kitchen, a walk-in refrigerator and a “kegerator.”

$800k Median sale price of homes in Kenwood for March 2025, according to Redfin

Napa County

A taste of success!

3% Growth in Napa County tasting room traffic in 2024, likely buoyed by international visitors.

14% Decline in Sonoma County tasting room traffic in 2024. Source: Wine Business Monthly

Sonoma, compared with Napa, caters to more price-conscious wine lovers and, therefore, suffers more in times of inflation.

Marin County

E-bikes chained

High density

16 Age one must be to ride an e-bike in Marin, according to ordinances passed this year which go into effect before school begins in August.

150 Number of ‘extremely-low- income’ residents at risk of homelessness due to displacement from 14 West Marin ranches when operations shut down this year as part of a settlement between ranchers and environmentalists.

110 % Increase in 911 calls for school-age youth bike accidents from 2019 to 2022—with e-bike accidents occurring 5 times more frequently for kids aged 10 to 15 than adults. Source: County of Marin

acre Size of lot in Point Reyes Station eyed as potential temporary affordable housing for the displaced ranch workers, after county supervisors voted to move ahead with purchasing the parcel, known as Calf Lot. Source: Marin Community Development Agency

July 2025

NorthBaybiz 17

Sonoma State 2.0 Re-envisioning SSU with a global view is vital for the university’s future

By Robert Eyler

C ommencement ceremonies at Sonoma State University in May marked the end of my 30th academic year as a lecturer, professor, program director, government-relations lead and dean at SSU. I was first interviewed for a teaching position at Sonoma State in June 1995. Shortly after I arrived here, SSU began a significant growth period in community engagement and student population, cresting in 2017 and 2018 (see the data in the graph). The Tubbs and associated fires in October 2017 shifted our population on campus and began a downward movement that multiple headwinds have assisted—the pandemic and successive rounds of problematic public relations, for example. There is blame to go around: On-campus (including me), off-camtpus in the North Bay and beyond, the Chancellor’s Office and in Sacramento. We all could and should have done more. The accompanying graphic, from the California State University (CSU) system, has become a significant focus on campus and at the CSU Chancellor’s office. In my opinion, this is our critical issue: We need more students. However, we need a globally differentiating set of programs and lifestyle reasons for students to come,

stay, and graduate from here. The graph's bars are not the number of students, but the number pursuing full- time study, converting part-time students into full-time students, similar to two part-time workers working 20 hours a week each, becoming one full-time equivalent worker. Full-time equivalent students, or FTES, are significant metrics in public and private universities regarding the economics of university revenues and creating SSU alumni who advertise why SSU is amazing. We want alums to be positively biased about their experiences. Full-time students generally have been advised and have a plan and path toward graduation; part-time students may be slowly going or returning to higher education when randomly considered. Over the next five years, one of the key debate items on our campus will be: What number of FTES is best for Sonoma State’s financial stability and for the region? The true challenge is creating reasons why students would want to study here from points across the globe, specifically in the western United States. In many ways, the graph also underscores a loss of niche and competitiveness: If SSU was differentially attractive

18 NorthBaybiz

July 2025

"We need to think like a start-up with some momentum—what becomes of SSU 2.0 is critical to the university’s long-term success..."

as a place to study, would students not come? Headwinds are both local and existential. To reverse that, SSU needs to become a more integrated regional partner, start doing things no other CSU campus is doing, and monopolize that position once established. We need to think like a start-up with some momentum—what becomes of SSU 2.0 is critical to the university’s long-term success and gaining access to global investment in our programs. If that change works,

communities clamor for universities to appear, expand and find external funding sources. Entire communities can be uplifted as universities grow in size and stature, especially if these communities become integrated partners in retail, student rentals and events. In the coming months,

I will expand on these themes as our Fall 2025 semester begins and my journey on campus continues. A key theme is getting high school,

Full-Time Equivalent Students (FTES), Sonoma State University, Academic Years 2013-14 to 2023-24 Source: California State University, Chancellor’s Office

the surrounding communities are enhanced. Like any employer, every university has economic effects in concentric circles of benefits and costs for the surrounding communities. Generally, economic effects are net positive for universities. This is why

community college and non-traditional students to push Sonoma State toward top-of-wallet, again with a global view on changing student perceptions about what this university offers new and continuing students. g

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NorthBaybiz 19

Coastal communities must brace for sea-level rise Stinson Beach could be wading through more than 3 feet of water by 2085

By Jason Walsh W hat will the future of North Bay coastal communities look like in the coming decades if predicted sea-level rise continues unabated? That’s what the Marin community of Stinson Beach has been asking, as it draws down on a three-year project to consider options for stemming the tides of the Pacific Ocean from eventually inundating the community of 366. A recently published report plans for a rise in sea levels of 3.3 feet by 2085 and introduces a new framework called an

Marin’s most immediately at-risk community—and long-term coastal flooding continues to create complications for local residents, beach visitors and natural habitats. The popular beach town averages between 600,000 to 1 million visitors per year, according to data from a Stinson ARC beach-user report and the National Park Service. The report estimates that hundreds of homes and other infrastructure are at risk from ocean waves or flooding from Easkoot Creek. “Strong winter storms and sea level rise will continue to erode the beach, flood roadways and impact existing infrastructure,

“adaptation pathway” to help Stinson Beach residents and local agencies take appropriate action to respond. The study is a culmination of findings led by Stinson Adaptation

affecting visitation and access to recreational areas,” county officials said in releasing the report. “Nearly half of all Stinson properties are exposed to emergent or shallow

and Resilience Collaboration, or Stinson ARC, a non- regulatory committee of local stakeholders. According to the report, those actions include raising roads, bridges and homes; elevating infrastructure like the Seadrift and Bolinas lagoon bulkheads; building dunes and cobble berms along beaches to create natural buffers; and transitioning to a community wastewater treatment system. The plan was developed with the input of community stakeholders, with an eye on engineering, environmental, regulatory, social and economic considerations, said Marin County Community Development Agency Assistant Director Chris Choo. Consulting firm Environmental Science Associates were engaged to identify and analyze feasible adaptation strategies. Sea-level watchdogs consider Stinson Beach to be West

A virtual reality simulation of Stinson Beach after 100-year storm and 0.8 feet of sea level rise. [Courtesy County of Marin]

groundwater, putting septic and underground utilities at flood risk.” Stinson got a taste of what could be in store for coastal communities in 2023, when it endured several atmospheric rivers and storm surges. Some properties sustained thousands of dollars in damage, the county reported—and the public beach parking lot was closed for three weeks. Stinson ARC estimates that just 1 to 2 feet of sea-level rise will flood critical low-lying infrastructure like Highway 1 and utilities. The Marin County Board of Supervisors will consider next steps for Stinson Beach at its August meeting. The Stinson ARC report can be viewed a t marincounty.gov . g

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July 2025

Only In Marin

Changing rules in Novato, changing chains in Sausalito and changing ‘slime’ in Corte Madera By Bill Meagher

T here’s a 124,000-square- foot office building at 100 Wood Hollow Drive in Novato. It has just one tenant. There are eight spaces available in the 3-story building with lease rates at $33 a square foot. But the lease rates and vacancies aren’t really the story. You should go by and take a picture of it because Align Realty has plans to build 66 homes on the site, nine of them deed-restricted affordable homes. Normally there would be no rush to snap that photo. Gaining approval to build something in Marin takes time—and by time I

residents vs. city government, or hill dwellers vs. flat landers, you don’t hear a lot of choruses of Kumbaya on the downtown sidewalks, though foreign languages is another matter. So the city is currently wrestling with what to do about chain stores, or “formula retail”—or nationally known businesses that attract customers. It’s a real issue in that Sausalito also has too many empty store fronts and there are businesses that would like to open in the bayside town. On the other hand, some chains have been known to win so many customers that locally established businesses have been harmed or closed. Looking at you, Starbucks.

Sausalito considers ‘formula retail.'

mean endless public meetings, kids being born and then going off to college, and weather patterns changing and then changing again. No, this is different because the Novato City Council gave the project its blessing in mid-May. The final project plans were filed in July 2024. That’s the kind of approval process that causes whiplash. This is the new new thing. Housing regulations in California have seen a sea change—and in Sacramento backrooms Marin’s name has come up frequently. While the county carries a national reputation for its beauty, wealth and education, to housing officials and developers, Marin’s hook is more about always placing Mom Earth first. It’s known as a place where the wheels spin endlessly—traction be damned—and where cash burns at a rate only slightly slower than a Tesla zero to 60 time. And where the word that precedes “developer” begins with an F and means sexual congress. It's fair to say that a drawbridge mentality has been pervasive in Marin—where those lucky enough to call it home are not always anxious to see it change. Let’s be honest, change is a…challenge. But the reality is that the rules of engagement around development have changed—and those rules will bring a reality that when the market and the economy catch up, building in Marin will be a different animal. And that animal won’t be a lumbering elephant, but rather a nimble and sure jungle cat. Sausalito Ponders its Downtown Sausalito is a different place than the rest of Marin, and I say that having lived in three different places there over the years. To begin with, it sits across the bay from San Francisco, and its economy is reliant upon that fact. It’s not that Sausalito isn’t a fine place in its own right, but without visitors from San Francisco and other spots, the town’s value would drop. Next, it’s frequently a place full of fissures. Whether locals vs. visitors,

Bill Meagher is a contributing editor at NorthBay biz magazine. He is also a senior reporter at The Deal, a Manhattan-based digital financial new outlet where he covers a noisy back alley off Wall Street. When he isn’t writing words for money he can be found with his wife Cindy, their five cats and two dogs, wishing the GOP had the backbone to tell Trump to go home. In the kitchen, kids (and presumably also adults) can gather together and create slime in a process which, according to its website, has 10 steps that include picking a base, color and scent. I’m so old that I remember when creating slime involved politicians, lies and opposition research. Please insert your own dinosaur joke here. g Your Marin Moment From the “You Can’t Make This Stuff Up Dept.”, we have a brand-new entry: a business called Slime Kitchen in the Village at Corte Madera shopping center. There are almost a dozen locations across California, Nevada, Oregon, Iowa and soon Texas. After a public meeting in May that featured spirited debate on what action, if any, the city should take, the Sausalito City Council instructed its planning staff to come up with different concepts on chain retail setting up in downtown. One option would be to prohibit them all together. Another would be to change the current concept of a chain from a business with six or more locations to one with less than 50. Determining a business mix that works is always tricky, just ask any mall management team. On the other hand, read the last item in this column for proof that any mix may have interesting choices to satisfy consumers. One thing is for certain. At this writing, Sausalito has 17 commercial vacancies in the downtown area. That number isn’t making anyone happy.

July 2025

NorthBaybiz 21

Blunt economics

Sonoma County cannabis industry treads water as promised legalization boom never materializes

By Janis Mara

22 NorthBaybiz

July 2025

T he Sonoma County cannabis industry is continuing to falter despite a recent cut to local cultivation taxes which, experts say, is outweighed by the longstanding challenges facing the industry. “Is it a lifesaver? The answer is ‘no,’” says Robert Eyler, a professor of economics at Sonoma State University. The 45% tax reduction in April “is good in that it does reduce the cost of cultivation. But it’s still a very, very hard market in which to stay afloat.” A plethora of problems—a supply glut, taxes, competition, onerous regulations, resident resistance—plagues the industry, says Eyler, who conducted a study of the economic impacts of cannabis on North Coast county economies in 2023. “There is more supply than demand and it’s forced a reduction in prices that may not be economically viable for small producers,” Eyler says. The chief executive of a nonprofit focused on small North Bay cannabis farmers seems to agree. “In 2018 at the dawn of legalization, a pound of [outdoor- grown] cannabis was selling for around $2,000 wholesale and now it’s selling for $300 a pound, which is the cost of production,” says Genine Coleman, the chief executive of Origins Council. Recreational cannabis was legalized in California in 2016 with the passage of Proposition 64. Starting on Jan. 1, 2018, the sale and taxation of recreational marijuana that was set in place by Prop. 64 became effective. Competition is another challenge facing the industry. Since illicit cannabis operators don’t pay legally required taxes and fees, they can undercut legitimate operators in price, giving them an unfair advantage. Illegal operations are not the only competition faced by Sonoma County cannabis businesses, says Coleman, whose organization is a California 501(c)(4) nonprofit advocating for independently operated small farmers cultivating half an acre or less. For decades, the so-called Emerald Triangle—the cannabis- heavy counties of Humboldt, Mendocino and Trinity—was nationally known as the center of California cannabis. Sonoma County served as a kind of gateway to those counties. “In 2018, at the dawn of legalization, big corporations with a lot of money invested in Santa Barbara County and now Ventura,” a seismic shift that hit Northern California cannabis businesses with unexpected competition, Coleman says. These competitors have ample capital and can utilize economies of scale not available to the mom-and-pop growers Coleman represents. Another factor: State, county and local taxes have long driven up the cost of doing business, cutting into profit margins. A new state excise tax increase scheduled to kick in July 1, exacerbates the problem. “The excise tax increase up to 19% starting July 1, 2025 would likely reduce the size of the licensed cannabis market,” says Seth Kerstein of California’s Legislative Analyst’s Office. The nonpartisan office has provided fiscal and policy advice to the legislature for the past 75 years. “The increase would raise prices by around 4%,” Kerstein says. “The metric we tend to think of in this context of forecasting tax revenue is a tax that’s a percentage of the retail sales, so we think about it is in terms of what effect it would have on the total number of retail sales,” Kerstein says. Coleman adds, “We’re already struggling to have consumers

purchase in licensed dispensaries when there’s a lot of unlicensed choices out there. This will drive even more businesses out of the market.” ‘The regulatory nightmare’ Next to taxes, regulations are some of the most daunting challenges the North Bay—and statewide—cannabis industry faces. Applicants face literally years of paperwork, fees, back-and- forth with officials, delays and frustration, Coleman says. “It has taken some people as long as 10 years to get set up,” Coleman says. The regulatory nightmare doesn’t stop there, according to Robin Goldstein, director of the Cannabis Economics Group and a UC Davis economist in the Department of Agricultural and Resource Economics. Once a grower finally gets going, “Every cannabis plant has to be tagged with its own RFID tag,” Goldstein says, referring to Radio-Frequency Identification, which tracks objects. “You have to enter it into the track and trace system every time you transfer from the farm into a batch that’s going to be packaged and it moves through the supply chain you have to enter every minute detail. “Cannabis businesses across the street have to hire dedicated employees and have high labor costs,” Goldstein says. “There are safety and health regulations in all industries but there is no other agricultural industry where you have to track the origin of every plant back to where it came from.” Also, “Basically, the state requires that every single cannabis project be subject to the California Environmental Quality Act,” Coleman says, referring to environmental review of outdoor cultivation. Many such projects are legacy projects, meaning they either were operating illegally or operating as medicinal products for years. “Normally under CEQA if you have a parcel that already has been cultivated, you are mitigating environmental impacts. But the state ignored that and is basically treating everything like a brand-new development project,” Coleman says. Neighbors raise concerns Cannabis cultivation projects have been subjected to a higher level of discretionary review, which also invites more engagement from neighbors, she says. Along those lines, some residents have formed the Neighborhood Coalition of Sonoma County, a 501(c)(3) nonprofit that has a website, an email list, a newsletter and a blog. Its members attend county government meetings, write letters to the editor and elected officials and otherwise advocate for their goals, which include excluding cannabis cultivation from certain areas. One of its most active members is Craig Harrison, a resident of Santa Rosa’s Bennett Valley neighborhood who acts as a representative of Bennett Valley Citizens for Safe Development. Harrison, a retired attorney, says he would like Bennett Valley and about half a dozen other areas in the county to be deemed exclusion zones where cannabis could not be grown outdoors. Harrison says the group’s concerns include water supply and odor. “We’re in a Zone Three water supply here. Groundwater is limited, and cannabis is a thirsty crop, so we have some concerns about that,” says Harrison. Harrison’s assessment of cannabis as “thirsty” is shared by

July 2025

NorthBaybiz 23

“That [craft cannabis] market will continue to exist, but to be realistic, if a lot of brands are competing for that segment, there’s going to be a lot of winners and losers.” — Robin Goldstein

be denied. Another concern is odor, Harrison says.

some, but not all, in the field. According to a UC Berkeley adjunct professor whose work explores the effects of water management activities on freshwater ecosystems, “our research hasn’t found cannabis to be particularly thirsty relative to other crops,” says Ted Grantham in a 2021 blog post by the Public Policy Institute of California. “Legal outdoor production uses about the same amount of water as a crop like tomatoes,” says Van Butsic, an adjunct fellow at the institute’s Water Policy Center. Harrison says, “We also have Matanzas Creek going through our valley and it’s got five threatened or endangered species in it. When is the water used the most? August and September when the water level is at its lowest, which challenges the creatures living in the creek.” According to the county’s draft environmental impact study released in May, if federally protected wetlands or other waters are present and fill of any state or federally protected wetlands would result from implementation of the project, then a buffer of 100 feet around these features will be required. If the project can’t be redesigned to avoid all federally protected wetlands and other waters, then the application will

“The things you are smelling are terpenes, and there’s one in particular called beta myrcene, and the state considers it to be a carcinogen,” Harrison says. According to a December 2024 newsletter from the Neighborhood Coalition, “Cannabis—An Imminent Threat to Our Bucolic County,” proposed changes to the county’s cannabis ordinance shrinking minimum lot sizes to 5 acres “means the stench from outdoor grows will be unavoidable and intense. …spewing airborne carcinogens into our unprotected neighborhoods and homes.” “It’s a health problem,” Harrison says. As part of the draft environmental impact study, Sonoma County commissioned Trinity Consultants to perform a study of the potential impacts of beta myrcene. Based on the work performed in the study, “which was developed by experts that relied on substantial evidence (i.e., scientific research), emissions of beta myrcene would not be at a concentration high enough to cause the community harms related to pharmacological and other adverse effects (e.g.,

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24 NorthBaybiz

July 2025

Recent cannabis-industry tax relief from the County of Sonoma is offset by a July 1 increase in the state excise tax.

sneezing, itching, nasal congestion and irritation, drowsiness, moderate skin and eye irritations).” The report concluded, “Therefore, with reliance on data and analysis based on scientific evidence, the general public would not experience adverse health effects due to exposure to beta myrcene emissions from an outdoor cannabis cultivation site that could be allowed under the proposed Cannabis Program Update.” Aside from the issue of health effects, there’s no doubt the odor is offensive to some. Sonoma County’s interim health officer noted, “While current research doesn't definitively show that beta-myrcene or other chemicals from a cannabis farm are harmful to nearby residents, the odor can certainly be bothersome to neighbors, and that's an important consideration.” The study, which will guide the development of a revised cannabis ordinance, proposes mitigation measures to offset the odor. The report calls for structures containing cannabis to be equipped with filtration and ventilation systems to control odors, humidity and mold, except for structures containing only prepackaged cannabis products. “The air filtration systems are to be sufficient to prevent internal odors from being emitted externally and must rely on activated carbon filtration, negative ion generation, ozone generation, or other odor control mechanisms demonstrated to achieve the same odor reductions so that odors are not detectable outside the structure,” according to the report. Another concern expressed by the Neighborhood Coalition is aesthetic. “Don’t take up our ag land and mess up our scenic corridors with white plastic hoop houses everywhere,” Harrison says, about the covered structures for growing plants. The draft environmental impact report proposes as mitigation that if a hoop house is visible from a public vantage point, any covering must be non-reflective; weed

block materials shall be made of non-reflective and non-plastic materials; and installation of solid fencing, such as wood, masonry and chain link covered with privacy cloth, is prohibited within County-designated scenic landscapes, scenic corridors and community separators. The draft environmental impact report contains a number of changes the county is proposing to its cannabis program. The report proposes making operational and zoning changes and removing caps on the number of businesses that can operate in the unincorporated area of the county. Is a strong, local cannabis industry viable? One of the biggest updates being considered would be designating cannabis as "controlled agriculture," rather than a controlled substance, which would allow for expanded land use and other regulatory relaxations. Sonoma County is contemplating the changes in hopes of stabilizing the industry, though by now it seems likely that the vast riches from cannabis tax revenue that municipalities were envisioning when it became legal in California will never materialize. Given the weight of regulations, supply glut, taxes, competition and resistance from neighbors, it’s hard not to wonder whether the Sonoma County cannabis industry will collapse under the weight of all the obstacles. The number of cultivators has plummeted from 155 in May 2023 to 66. One relatively positive note seems to be that this fiscal year’s “taxable canopy,” or cannabis crop, is similar to that of the fiscal year 2023-24, McCall Miller, the county’s cannabis program coordinator, said in an April report to the Sonoma County Board of Supervisors. Miller said this suggests that the market is stabilizing. Outdoor cultivation is about the same as last year at around 13 acres in unincorporated Sonoma County. Eyler says, “I wouldn’t say it’s a dying industry, because the

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