The fires in northern California have destroyed an estimated 300 cannabis farms and caused more than $3 billion in damages to the state. Set to be the largest market of all the recreational weed states, the 2018 debut of recreational marijuana in California may have just had a big setback. Certainly the families and businesses that own the fire devastated marijuana farms are in jeopardy of complete financial ruin. However, sympathetic people and businesses are ready to provide support to California’s cannabis community, but the federal government will not let them. A flurry of California wildfire donations to marijuana farmers were set to provide some relief until all the money was returned.
The founder of the California Growers’ Association setup crowdfunding through the YouCaring website to receive California wildfire donations for cannabis farmers. After donations began to pour in, he received an apology stating that all the funds had been returned. Banking is one of the largest issues the cannabis industry has to contend with and one of the ways that the federal government is making it difficult on state legal medical marijuana and recreational marijuana. Where exactly is the line that the United States federal government will not cross to interfere in state legal cannabis businesses?
With the most devastating wildfire in California history laying waste to its members’ homes and livelihoods, the California Growers Association responded in the way most crises are handled in 2017: crowdfunding.
As of Tuesday morning, 41 people have perished in the fires, which have burned more than 101,000 acres and destroyed 6,700 homes and businesses at an estimated cost of more than $3 billion. Multiple fires are still burning in Mendocino, Napa, and Sonoma counties—the very heart of California’s wine and cannabis region—and 88 people are still missing in Sonoma County alone, the Santa Rosa Press-Democrat reported.
The California Growers Association, the main lobby representing cannabis growers in Sacramento, estimates that as many as 300 marijuana farms have been affected in some way by the deadly fires still burning near Santa Rosa, about 60 miles north of San Francisco. Some have seen entire crops tainted with toxic smoke and ash, while others have lost both their harvests and their homes to the flames.
The fires came at the worst imaginable time: at the height of the fall harvest, in a year when many growers had exhausted their savings or taken on investment to obtain costly county permits ahead of statewide legalization. And unlike other farmers in the region, cannabis growers generally don’t qualify for crop insurance.
Within days, Hezekiah Allen, CGA’s founder and executive director, had set up a campaign on the San Francisco-based crowdfunding website YouCaring to collect donations to help the farmers recover. By Monday, about 50 people had pitched in more than $10,000 to the “CalGrowers Wildlife Relief Fund,” 100 percent of which—after processing fees, at least—would be sent directly to “cannabis growers who lost farms in wildfires.”
But just as the campaign eclipsed the five-figure mark, Allen began receiving messages from would-be donors. They’d had their donations canceled and their monies returned. A message from YouCaring “via WePay,” the company that processes the crowdfunding platform’s payments, popped up in Allen’s inbox. “We apologize,” it read, but the campaign had violated WePay’s terms of service. Pending payments were canceled and all donations returned.
The reason? Marijuana.
“Current U.S. federal law prohibits the purchase and sale of cannabis and cannabis extracts,” said the email sent to Allen, which he shared with Leafly News. “Subsequently, WePay is unable to process payments connected to the production, sale, or consumption of cannabis, even in situations where such activities would be permitted under state law.”
Allen’s efforts to patiently explain that the fundraiser had nothing to do with buying or selling drugs went unheeded. “My reply was, ‘Hey, we are not doing any of these things,’” he said Monday, adding that he’d been unable to reach anyone at the company via phone to talk directly.
He’s since set up another crowdfunding campaign through the service Nationbuilder—and has begun explaining to the cannabis community why they’ll need to submit their donations all over again on a different site.
In an email to Leafly, a YouCaring spokesperson confirmed that the decision to reject payments and end the campaign was WePay’s:
While YouCaring support all forms of treatment and most fundraiser types, our payment providers (WePay & PayPal) do not allow fundraisers for anything marijuana-related, including for medical reasons. Current U.S. Federal Law prohibits the purchase and sale of marijuana. Subsequently, our payment provider is unable to process payments connected to the production or sale of cannabis (including CBD oil), even in situations where such payments would be permitted under State Law.
WePay did not respond to multiple requests for comment sent via a direct Twitter message, a public tweet, and an email sent through the company’s website.
Founded in 2008 following the frustration of collecting cash to cover a bachelor party and currently led by a millennial CEO, WePay says it processes billions of dollars annually for crowdfunding sites like GoFundMe and online business platforms including Constant Contact.
It’s not the first time the site has shut down a charitable fundraising effort over questionable “violations.” In 2014, WePay canceled a sex worker’s campaign to raise money to pay for emergency medical bills on the grounds that the sex worker’s campaign had a “connection to pornographic items.”
Rejection by third-party payment processors is a familiar story in the marijuana industry. Many recreational and medical-marijuana dispensaries cannot accept credit card payments because of restrictions applied by merchant services companies, who, fearful of the federal Justice Department, opt not to handle money for marijuana transactions.
But to abruptly end a crowdfunding effort in the midst of a dire emergency? Somehow that feels different.
Reached for comment on Monday evening, Allen sounded more exhausted than angry.
“We’re gonna be fine—we’ve got a solution,” he said, describing the replacement plan to collect cash via a nonprofit 501(c)3 fund, donations to which would be processed via Paypal, which has no such prohibitions. “We forgot that we can’t use all the tools at society’s disposal, because we’re sort of second-class.”