Statewide: Going to pot

As the map above shows, the state’s agricultural economy is growing. But not included is maybe its most valuable crop — marijuana. “Yes, I have heard that in the past,” Agriculture Commissioner Steve Troxler admits. “I don’t think there is any scientific data to support that, but we’ve been famous in North Carolina for moonshine for quite some time, and I’m sure that we do have some people that are illegally growing marijuana in North Carolina.” The buzz on the state’s bud harvest has been building for some time now. When the Washington, D.C.-based National Organization for the Reform of Marijuana Laws tried to put a price tag on Tar Heel pot production in 1997, it came up with slightly more than $120 million, far below tobacco’s $1.3 billion and less than half cotton’s $300 million. Nine years later, the cannabis crop topped $670 million, according to DrugScience.org, a pro-marijuana website that ranked the state sixth nationally in production. That was higher than tobacco’s $496.1 million and cotton’s $302.6 million.

Each dollar of a crop’s cash receipts usually generates two more in the supply chain, N.C. State University economist Michael Walden says. If that holds true for marijuana, it contributed more than $1.3 billion to the state economy eight years ago. That would have rolled about $40 million into state government coffers — “assuming the output was legally taxed,” he adds. Pot’s illegal status provides one of its strongest price supports. “Just as was the case with alcohol in the 1920s, society’s acceptance of and desire for marijuana has led to a huge market,” says Ben Scales, an Asheville lawyer who specializes in marijuana cases. “And the prohibition has led to high untaxed and unregulated profits for those willing to take the risks.”

Over the last decade, law enforcement has uncovered plenty of large grow sites — plots with more than 100 plants — says Brian Neil, special agent in charge of the State Bureau of Investigation’s intelligence and information section, which oversees its Domestic Cannabis Eradication/Suppression Program in partnership with the federal Drug Enforcement Administration. “Most of 
our data over the years has shown that large-scale domestic grows in our state have been done through cartel connections.” According to the DEA, most pot sold in North Carolina and the U.S. is imported from Mexico, but it’s less trouble if the criminal organizations can grow it closer to their customers. “That’s a business model that makes sense,” Neil says, “because you don’t have to try and get it across the border and get it interdicted somewhere else.”

The state’s climate has helped make marijuana a growth industry. “We see it all over,” the SBI agent says, “but concentrated in the central part, the western part — not the eastern.” Though that’s the state’s agricultural heartland, it’s also flat, making hiding it much harder. It’s also the most conservative section of the state. “In the western part of the state, there is evidence that the mindset is more progressive, so there’s easier access to marijuana,” says Ben Kennedy, secretary of the state chapter of NORML. “Plus, in the mountains region, it’s easier to hide. In the east, they’re scared to death. They’re completely out in the open.”

Competition for homegrown cultivators comes not only from foreign criminal elements but domestic legal growers as weed has shed its outlaw status — for either medical or recreational use — in 20 states and Washington, D.C. Five years ago, a pound of primo pot wholesaled for between $4,000 and $5,000 in North Carolina. Dealers now can score that amount for $1,000 in Colorado, where its recreational use became legal Jan. 1, and California, where it’s legal when prescribed by a doctor. “Consequently, some people have stopped growing and started importing from the legal states, because growing is inherently more risky than importing,” Scales says. “And there is simply not the same profit incentive as there used to be to growing.”

Legal competition has other consequences. Last year, Scales defended a client who grew 2 to 3 pounds indoors every three to four months. That kept inventory under trafficking amounts, which in North Carolina is more than 10 pounds. “Problem was, when the cops came in, she had 19 pounds in her freezer that she hadn’t been able to move due to the price pressures from the California-Colorado product. So she goes from looking at probation with no possibility of jail time to a mandatory minimum 25 months just because of the market glut from the West Coast.”

Scales drafted legislation to legalize marijuana for medical purposes in North Carolina and predicts the measure would create $182.7 million of retail sales and $42.5 million of state tax revenue annually. But the bill, sponsored by Rep. Kelly Alexander, a Democrat from Mecklenburg County, was snuffed out in committee in February 2013. Even if it were to find its way through the General Assembly, don’t expect it to transform the rural landscape.

North Carolina NORML’s best-case scenario is that legalization leads to industrial hemp supplanting tobacco. Today’s potheads want weed that delivers the best highs. Those strains are typically cultivated indoors, where growers can control light, nutrients and other variables. Says Kennedy: “I don’t see the day when rolling fields of tobacco are replaced by rolling fields of marijuana plants.”