Walnut Rise

Growin' it in the ground

The Cannabis Distribution Company delivery

Today, I ventured over the St. John’s Bridge in a lightly falling snow to deliver 100+ lbs of whole flowers to The Cannabis Distribution Company, a part of CannaGuard Security. They are a licensed wholesaler that provides, among other things, trim and flower to processors. All of our little lots of flowers, 2-15lbs each, went to their warehouse for picking up by makers of hash oil, shatter, carbon-dioxide oil, etc. This delivery was about a third of the fall harvest; since our main three stores are selling at a steady rate, I did not want to deliver all our stored crop, but at the same time, the sales rate and price for trimmed flowers came together to convince me that we should move much of the remainder to processors. With edibles and tinctures and oils increasing in sales while trimmed, raw flowers are not increasing in sales, it seems like the market for many growers will be in the processing world, where a processor licensee might need 400 lbs of trim for one concentrates run.

After delivery and a tour from Andrea and Dan, I wound my way to Thurman Street Collective for the first time! I have always let Bobby (the owner of Thurman Street) haul our cannabis orders up to Thurman Street, since his farm is just down the street from us; it was great to see his beautiful space. And, he is working hard to get his next store open: the Power Plant, on Foster, in Portland. Very exciting! Good luck, Bobby! And before leaving Portland, I found my brother, Josh, at his new employer, the Daily Journal of Commerce, located in offices at the Pittock Building (10th and Washington, across from the big food-cart block and two blocks from Powell’s). He works there as photographer and journalist.

 

Growin’ it in the ground and sellin’ it in town,

Casey

Official campaign website and instagram

Our campaign website is up: www.caseykulla.com. And our Instagram feed is at caseykulla

If you want to hear about our focus on respect, integrity and evidence-based decision-making, just email me at casey@caseykulla.com to arrange a chat. We’re all about initiating the generational transition of leadership! And I want to hear from county residents about what your community needs, what is going well, and you want to see in your town.

 

Growin’ it in the ground, and running for commish!

Casey

Democracy in Chains, by Nancy MacLean

I wrote this letter to Nancy MacLean, a professor of contemporary history at Duke University:

Professor MacLean,

Your newest book is devastating, timely, awful, hopeful, inspiring. Most importantly, “Democracy…” is awakening. I feel like it is perhaps improper to use the term “woke,” out of the context of racial injustice and systemic racism, but it seems like the most accurate word to encompass the feeling your book invokes.

It felt exactly like I, a very progressive, native-West Coaster, had been deceived for a long time. And it turns out to be true! Now, when I hear “states rights” invoked to defend state-regulated marijuana (which I grow), I cringe. I now know that the anger I felt towards the federal government about things like cannabis is a manufactured anger designed and paid for by the radical right. It makes me furious (maybe a little strong).

Do you ever travel out to the West Coast for speaking engagements? I feel like our little community (which includes a small liberal arts college, Linfield College) really needs to hear your words in person. On the other hand, our local public library had your book on the “new” shelf, because the head librarian is constantly on the lookout for books like yours (shout-out to Jenny Berg!). I am going to request your other books (Behind the Mask of Chivalry and Freedom is Not Enough), now.

Thank you again! Keep up the great writing!

OLCC audit: a response

I wrote to Jonathan Bach at the Statesman Journal:

Jonathan,

I just finished reading your article on the SOS audit of the OLCC. Great reporting that went much deeper than other articles I’ve seen.

A couple of things that the OLCC does not bring up:

First, the OLCC continues to approve licenses, even as the amount of cannabis in the legal market has exploded in terms of volume. The direct result: very low wholesale prices for growers. And the result of that: a strong incentive to move product to the black market. I was at the first METRC training, with the manager of METRC from Florida (Scott Denholm, April 2016). He explained that METRC was designed to keep product from moving into the legal, regulated market from the black market, under the assumption that prices would always be higher in the legal market (and thus, that the incentive would be to move product IN rather than OUT of the legal market). This mistaken assumption underlies the basis design of the self-reporting system: METRC designed a one-way valve that faces the wrong way, as it were.

Second, threatening fines and loss of license for volunteering to be regulated by the state is a backwards-looking activity. It reminds me of Prohibition. I think the OLCC should be encouraging, rather than threatening growers, processors and retailers. I think the state and the OLCC would better spend their time and treasure asking licensees how they can make it easier to comply with the basic goals of the system, rather than continually adding rules to try plugging the dike, and threatening licensees. We get enough threats from the federal government!

Just some basic thoughts I’d like to have out there. I find the OLCC is not receptive to suggestions (it is like they are so busy that they cannot stop to listen to constituents).

Thank you for your writing, Jonathan!

The Syria quandary

As I type, Turkish troops are approaching the Syrian city of Manbij, where US troops are defending the city with Kurdish-flagged soldiers who are funded, armed and trained by the US and us taxpayers. To be very clear, this means that a NATO ally is preparing to attack the fortified positions of another NATO ally, in a third country. And to further the clarity, this means the US is occupying a portion of another sovereign country, against its wishes. What!?

The US needs to get out of Syria. The rationale for occupation seems to be the destruction of the physical presences of the Islamic State caliphate, but it still means we’ve entered another country against its wishes, for harmful purposes. And our president claims to be dedicated to border integrity and against illegal immigration, while he is authorizing the invasion of another country.

Willamette Law Review Symposium 2018

Friday was a legal marathon at Willamette University! The Law Review students organize a symposium each year, focused around a particular theme. This year was all about Federalism in the era of Trump, and particularly how Oregon topics can illuminate federalism. Naturally, there was a panel discussion on marijuana law, plus sessions on immigration, intentional partisan gerrymandering, the environmental administrative state, worker misclassification and tax law, the tax court system, and a keynote address by Ilya Somin on why progressives should care about federalism.

The Billy Williams AUSA summit on marijuana was convening as the first session, on marijuana law, was beginning. Notably absent were most Oregon cannabis attorneys (presumably at the summit!). I asked about the legal history and caselaw that underpins Oregon’s decision to exclude cannabis from right-to-farm laws but include it as a farm product. Didn’t get much answer.

The keynote speaker, Ilya Somin, is a law professor at George Mason University and a writer and speaker in support of libertarian causes. He argued that progressives have a lot to gain from promoting federalism, especially in the areas of federal commandeering, cannabis law, and asset forfeiture. What I wanted to ask him: “what examples would you provide to a conservative audience, to encourage them to support federalism?” I suspect that his audience at Willamette would be horrified and disgusted at the causes for which federalism might be invoked in conservative circles. Federalism is most enticing when “your” political party is not in a position of power in Washington D.C. Perhaps most disturbing to me about federalism is that, while it is a political perspective as old as our Constitution, federalism is most strongly invoked with reference to “states rights” and segregation and white nationalism and massive resistance and slavery. This is also the root of modern libertarianism. Yikes.

I just happen to be in the middle of reading “Democracy in Chains, the deep history of the radical right’s stealth plan for America” by contemporary historian Nancy MacLean (Penguin Books, 2017). Her book (which I learned yesterday is called popular scholarship) illuminates the origins of Charles and David Koch’s libertarian activism in segregated and post-segregation Virginia. I’ll never see libertarian philosophy the same again.

Paul Diller, Willamette Law professor of governance and public policy, presented some of his research on intentional partisan gerrymandering. One thing that stuck with me: “Gerrymandering does not lead to polarization of politics, but it does capitalize on pre-existing polarization.” And Diller also provided examples of how gerrymandering can actually be used to provide public benefits, including promoting diversity of opinions or diversity of experiences. One result of intentional partisan gerrymandering, Diller explains, is pre-emption; that is, state legislatures pre-empt the passage of laws at the county or municipal level that the gerrymander-benefited political party does not like. Legislatures pre-empt by passing laws that expressly forbid certain law-making at the city level, by punishing cities for passing certain laws, by denying funds to cities that attempt to pass certain laws, by threatening to remove local officials, and by allowing other cities to sue the offending city. Diller also submitted an amicus curiae brief to the Supreme Court in Gill v Whitford, the intentional partisan gerrymandering case that was argued in the fall.

 

US Attorney meets with someone about weed?

Yesterday, the US Attorney for Oregon hosted a summit regarding his office’s newly-invigorated focus on arresting marijuana producers, distributors and users (“Good people don’t use marijuana” says his boss, A/G Jefferson Sessions).  The event was not open to the public, the invitee list was not made public, and sources were not cited when he made a public statement. I sent the following email to Mark Pettinger, the PR man for the OLCC.

Mark,

Haven’t heard from you in a while. And I hear there was a big summit with Billy Williams yesterday.

Some questions:
1) Who was on the guest list for this summit? I would like to make that list public, since it is in the interest of licensees and the public.
2) Why was the summit closed to the public/press?
3) Is the OLCC going to release anything regarding the summit? Press release, new guidance?
4) What is the OLCC jurisdiction/authority around capping/stopping/halting new license approval/granting?
5) What are the sources for claims about overproduction and product leaving the licensed world?

Regarding product leaving Oregon, I have a few comments, especially as regards OLCC licensees. If you are not the one who can act on these, please send it on to someone who can.
1) METRC is easily gamed. There are a hundred different ways to pull licensed product out of the system without anyone ever knowing. I can show anyone at METRC or the OLCC how to do this.
2) People routinely tell me of their side businesses, or using their license as a front, or of others who are doing this.
3) The large amounts of flower in METRC have caused wholesale prices to plummet, creating a huge incentive for folks to take product out of the legal market. The OLCC does have the power to limit canopy; this will directly reduce the amount of flower on the market. The biggest problem is yet to come, when growers start to think about fall harvest season again, while still holding on to last year’s flower (this will likely cause either a huge dump of product and price in the fall or it will go out of state).
4) What is the protocol for remaining inventory when a grower or processor gives up their license? Where does the inventory go?

Thank you, Mark!

Casey Kulla
farmer, Walnut Rise

Short session of Oregon Legislature begins soon

In the February, off-year session of the Oregon Legislature, one Senate Bill has caught the land use community’s attention: SB 1502, sponsored by the Senate President Peter Courtney and Hansell.

This bill is a stinker. The text would eliminate all laws and regulations on all lands (outside the urban growth boundary) in Oregon counties with less than50,000 people. Environmental, land use zoning/permitted uses, water law, etc. I wrote the letter below in response. Please copy and paste to your state senator.

Senate President Courtney,

I am writing from Grand Island, Oregon, just across the Willamette River from your district (I am in Senator Boquist’s district 12). My wife and I have farmed certified organic vegetables and tree fruits for 12 years here. I also begin law school at Willamette in August.

Please reconsider your sponsorship of SB 1502. As a farmer, environmental scientist and a landowner adjacent to gravel quarries, I know firsthand the impacts of non-agricultural uses adjacent to commercial and economically-valuable farming. They are not compatible. And land use laws are in place to protect and support our Number One agricultural product, cattle.

Eastern Oregon needs Salem’s help and attention. But Salem can do this in constructive, positive actions, rather with than regressive, reactive measures. We can provide funding for and construct mobile USDA slaughterhouses like many Washington counties have. We can provide the funding (matching or otherwise) for improved internet access. We can build a new airport, in that is needed. But to take away protections from land is like taking money from the principal of an investment, rather than the interest the investment accrues.

I am happy to discuss this more in person. I know your schedule is rapidly filling up, but I am happy to chat with one of your many wonderful legislative staffers.

Thank you for your time!

Casey Kulla
farmer, Grand Island, Oregon
Oakhill Organics and Walnut Rise

Impeach Secretary Zinke

Our Secretary of the Interior, Ryan Zinke, should be fired, impeached or otherwise removed from office. Why? The list is long:

Disregard for science and scientists

Opening up territorial continental shelf to off-shore oil drilling

Reducing size of national refuges

Increasing price of admission to national parks

Putting interests of oil and gas companies above public on federal lands

Not speaking up about climate change to President

 

Secretary Zinke, you are not a conservationist in the mold of Teddy Roosevelt. Leave your position before you become the next Ann Gorsuch (Justice Neil Gorsuch’s mother, who was forced out as Interior Secretary by President Ronald Reagan)!

Capital Press editorial on new tax law

The Capital Press published an editorial this week endorsing the new federal tax bill. I agree with the editorial board that some items in the tax bill do seem to help lower taxes on certain farm businesses.

However, the editorial board has a perspective that includes promoting the largest, most debt-burdened, most soil-intensive agricultural enterprises at the expense of smaller farms, rural communities and taxpayers in general.

Take the section 179 depreciation/expensing change. Most farms use lines of credit or dealership-based loans to “purchase” new pieces of equipment, so they will not be using the depreciation schedule anyway; they would be using the interest on debt deduction on the schedule F. Those that can afford to drop $1 million on a new tractor with cash are very large enterprises that really stretch the everyday definition of farms. For a smaller farm, the depreciation/expensing schedule acts as a tax “bank account,” since we get to take a percentage of the deduction every year for ten or more years. The tax laws seem to promote the carrying of large, never-paid-off debt, which I would argue is unhealthy for farm businesses and rural communities.

The estate tax point the board makes is based on the idea that these very large farms (I can think of a handful in Yamhill County who would meet this criteria) are already taxed on all these assets that they have accumulated through hard work. This misses the point that most farm businesses in Oregon primarily carry land as their largest asset; as you know, land increases in value over time, but if it is not sold, the value simply accrues without any capital gains or income tax applied to it. If 1000 acres are purchased in 1950 at $100/acre (a pretty standard number then), as the land value increases, very little is paid in property taxes (and until now, that was deductible on federal returns) due to our land use laws. But, essentially, upon death of the owner (but most big farms are not sole proprietors, but rather family trusts or privately held corporations), the land is transferred to a new generation or sold (most farmers are shrewd and know that giving heirs land is not a helpful thing). The land is then shown at its true market value of $2500/acre, for a gain of $2400/acre or a total taxable increase of $2.4 million. This is income that I believe our county taxpayers should be receiving, but is now saved by the small number of large landowners. Image how much more a retired school teacher or mechanic has to pay, to cover the farm family’s savings.

The editorial board does not mention a big tax hit that will affect farm businesses in Oregon: the large reduction in the deduction for state and local taxes. We pay about $8000 in state taxes, plus $3000-ish in property taxes, and we only own 48 acres. For a big farm (owning over 1000 acres and grossing over $1 million), the property taxes alone are well above the $10,000 cap on all SALT taxes that are deductible. As all tax laws are aimed at influencing behavior, this change will likely influence farms in one way: they will increase their rented acreage while divesting of more owned lands, a trend we’ve been seeing for years. What they get with renting is that all expenses are totally deductible, thus decreasing their adjusted gross income. I can think of many negatives for our county in having more land rented than farmer-owned, but I’ll save those thoughts for a different note.

I could continue refuting the editorial point by point, but I simply wanted to observe that the editorial board is essentially endorsing an agriculture that is bigger and more debt-financed at the expense of local communities and poorer taxpayers. And we haven’t even delved into the labor and immigration issues!

 

Casey

« Older posts

© 2018 Walnut Rise

Theme by Anders NorenUp ↑