After the Gold Rush: What Happens When California's Weed Bubble Bursts?

Posted by McNair Evans and Cord Jefferson

GOOD 026, Beg Borrow or Steal, Magazine
I’m surprised to find that Zach Moldof dresses like me. When we’d spoken on the phone in early December for an article I was going to write about California’s cannabis industry, I’d pictured him as a linen-draped hippie, something like Tim Robbins’ insufferable New Ager in High Fidelity. But when Moldof answers the door to his San Francisco apartment, a narrow four-bedroom perched above a tattoo shop, he does so in a pair of low-top canvas sneakers, snug-fitting jeans, and a black hoodie that partially hides his curly brown hair. Save for his glasses and a black baseball hat that reads bass across the front in big gold letters, I’ve got Moldof’s almost exact outfit stuffed in the duffel bag at my side. He’s tall like me, and slender, too. And when he speaks, he does so thoughtfully in a dry stoner drawl, like the smartest kid in detention.

“Come in,” he says, an anxious grin moving crookedly up his face. “Would you like some tea?” 
 
He leads me down a hallway past his roommates’ darkened bedrooms to the kitchen, which a real estate agent might describe as “cozy.” Moldof doesn’t drink coffee or alcohol, which makes him sick, but he sips tea constantly, pouring it from a delicate white and Han blue teapot whose elegance stands out on a kitchen table cluttered with dirty glasses, napkins, a laptop, rolling papers. When I knock over a brown paper grocery bag overflowing with recyclables, I apologize. “Don’t worry about it,” Moldof says, setting down his teacup. “I live here and I’m not fucking worried about it.”
 
It’s four days after Christmas and I’ve just arrived from visiting family in Arizona. Moldof is Jewish, but he didn’t go back to his hometown of Weston, Florida, for Hanukkah. Weston has a median household income of $95,000 and a median home price of $461,000—it was a rather ritzy place to grow up, with golf courses and shopping malls, and its entire western side abutting the Florida Everglades. 
 
These days, Moldof can’t afford a plane ticket across the country. Coming by money has been difficult for the 30-year-old. After graduating with honors from the University of Central Florida in 2005, he moved to New York to earn a master’s degree in performance studies at NYU's Tisch School, where his thesis dissected the origins of sampling in hip-hop. Though his initial goal was to get a Ph.D. and teach, after getting his second degree in 2007 Moldof decided to pay back some of the $60,000 in loans he’d already accumulated before diving into a costly doctoral program. At first he searched for jobs in his field—music gigs or academic writing—but when nothing materialized he started waiting tables for minimum wage. “It was barely enough to get by,” he says. “All I was doing was busting my ass at the restaurant every day just to wake up and do it again.” Still, he managed to save a couple thousand dollars. 
 
Frustrated by a life that was leaving him creatively unsatisfied, in August 2010 Moldof moved to California, where he hoped things would get better. “It was like, if you were watching my movie, you’d know something bad was going to happen,” he says. “You’d know it couldn’t just be as good and easy as I’d planned.” 
 
In Los Angeles, Moldof lived with his then-girlfriend and picked up a gig covering rap music and California’s marijuana dispensaries for Mishka, a New York-based streetwear label that also publishes a blog. He wasn’t getting paid, but Moldof was finally doing some work he enjoyed. 
 
Then, perhaps naively, Moldof loaned his girlfriend, a fashion stylist, several thousand dollars for her business. When both the business venture and the relationship failed, she refused to pay back the loan. “I wound up without a home, without a job, my savings were depleted,” he says. Moldof put out a frantic call to his social circles, “just begging for anything.”
 
Within a few days, an old college buddy living in Northern California answered his pleas. This is how Zach Moldof, an honors student with a master’s degree from one of America’s top schools, found himself working on a pot farm. 
 
* * *

No California locale has latched onto the state’s 15-year-old medical marijuana law the way Humboldt County has. Every autumn, thousands of people like Moldof descend onto Humboldt’s verdant weed fields for harvest season. It works like this: The season usually begins in October, when California’s high-grade marijuana farmers chop down their plants and let them cure in heated warehouses for several days. Three to four weeks later, when the crop is sufficiently dried, the growers import a team of temporary laborers. They’re like the migrant workers who follow seasonal fruit and vegetable crops, only they’re often young, white private-school kids armed with scissors. Their sole job is to trim away excess leaves from the pot buds, leaving only the most potent product for distribution. 

On his first trim, Moldof earned $200 per pound of buds, and he walked away with $1,000, tax-free. (A year later, with better equipment and more experience, he made $3,000.) More importantly, it showed him there is a different way, a way to make a life for yourself that isn’t reliant on a degree or job interview or LinkedIn profile. In most marijuana operations in California, you don’t find a job, you make a job, and then you answer to yourself. “I left [the trim] saying, ‘Wow, this seems like a way to fulfill my needs,’” says Moldof. He dived headfirst into California’s weed economy. 
 
A few months after leaving the farm and settling in the Bay Area, he founded Rad Reef, a “lifestyle brand” centered on California’s growing cannabis market. Initially the plan was for Rad Reef to be a medical marijuana delivery service, but the startup cost for product, licensing, and other fees was prohibitively expensive. Plus, carrying a bag full of marijuana and cash around San Francisco at night didn’t seem like the smartest idea. 
 
Then there was all the competition: Moldof says that in the past few years the growth in the cannabis trade has made it harder than ever to start a medical marijuana operation. “We’re at the point when the testing labs are flooded,” he says, “when the grow operations are flooded. Everything.” For the time being, Rad Reef is part record label, distributing Moldof’s pot-themed rap tracks, and part awareness campaign for HR 2306, Ron Paul and Barney Frank’s House bill to end the federal ban on marijuana. Moldof says pot is now a lifetime passion. “There’s no way I could leave cannabis,” he says. “I honestly believe that so many of the world’s needs can be met through this plant. I’m not going anywhere.” 
 
 
The question is, will he be able to pay his bills? Weed was supposed to be Moldof’s way out of low-paying, dead-end jobs. More and more, it’s looking like another labor of love that won’t pay the rent. Welcome to California at the confusing end of the weed rush. Opportunity is dwindling, but spirits remain, well, high. A few years ago, it was all the rage to compare the glut of people moving to California to work in the marijuana economy to the mid-19th century gold rush, and not without reason. In 1848, the year the gold rush started, much of the world was in economic peril. There were revolutions in Italy and Germany, and starvation in Ireland. In America, the agrarian economy faced spreading industrialization, and war was on the horizon. People needed money and wanted stability. And for tens of thousands of them, gold seemed like the answer.
 
More a game of chance than a job, searching for gold leveled the playing field. Property rights were still relevant, but many of the rules and regulations of big-city capitalism didn’t apply, nor did the strict social order of the class system. It didn’t matter if you were an East Coast blue blood or some shit-kicking farmer’s son; luck, like love, is blind, and if you struck gold, it was all yours. Then the blue bloods answered to you. Never mind that mining was dangerous and expensive and the chances of becoming rich were minuscule.
 
Fast-forward 160 years to the midst of the global financial crisis. In May 2008 as the banks were collapsing, American unemployment leapt to 5.4 percent—and most of the jobs didn’t come back. In nine months, 8.3 percent of Americans were jobless. Overseas, unemployment in the European Union jumped to 8.1 percent by January 2009. And the worst, as we now know, was yet to come.
 
Once again a burgeoning California industry looked to be an oasis in a desiccated job market. Medical marijuana had been legal in the state for more than a decade before the world’s economies started cratering, but in 2008, then-candidate Barack Obama vowed to allow cannabis companies operating within state laws to do so free from federal enforcement. It wasn’t just Californians who breathed a sigh of relief at the future president’s pronouncement. Sixteen states and Washington, D.C., have legalized medical marijuana, and 16 other states have pending legislation. In many places where medical cannabis hasn’t been legalized, pot has been decriminalized in small amounts, making weed one of the few things that red states—Mississippi, Nebraska—and blue states—Connecticut, Maine—can agree on.
 
Today, almost 80 percent of Americans believe medical marijuana should be legal, while other studies show that the majority of people under age 50 have smoked it. Even ultraconservative politicians like Newt Gingrich and Sarah Palin have admitted to smoking pot; weed has become so common that whispering about it on the sneak seems ridiculous, like having a speakeasy password to order mudslides at an Applebee’s.
 
No jobs, lax laws, lower stigma. To thousands of people like Moldof, it was the perfect opportunity to cut their losses in the regular economy. At the forefront of legalized pot, sunny California seemed like a place where any man with a will to succeed and a few weed plants could find a fortune, or at least a living. The green-gold rush was on.
 
But three years later, California narcotics officers began noticing a change in the pot operations they were busting. Growing marijuana is technically only legal for individuals, who are allowed to possess up to six mature and 12 immature plants. Farms exist within the bounds of the law because they call themselves collectives—a legal operation with, say, 500 plants, must involve dozens of people. Large farms aren’t necessarily illegal, but they’re more likely to be. Before, agents would routinely find massive weed farms tucked away in the state’s remote woodlands, but lately they’ve been coming across far fewer. In Fresno County alone, where authorities can usually find several dozen large-scale mountain pot farms, they found only nine in the summer of 2011. Most of the “grows,” they said, had been moved into California’s Central Valley, a fecund strip of land that stretches from north of San Francisco to south of Bakersfield, almost to Los Angeles. On the valley floor last summer, police discovered 121 pot farms, up from 37 the year before. And most of these were much smaller operations than their Northern California counterparts.
 
There were so many new growers dispersed throughout the state that cops no longer knew where to look for farms, or if arresting their owners would be worthwhile. (Prosecutors are hesitant to bring charges against medical growers.) Just as prospectors in the 19th century struggled with waves of competition, legacy pot cultivators are squaring off against a parade of new growers, who are killing the big farms and forcing the small farms to cut their prices. There’s more weed growing than ever before, and cops are able to find and seize less of it. Speaking to the Associated Press, state narcotics officer Brent Wood said, “We can’t touch ’em, and it’s everywhere.”
 
Who can touch ’em is President Obama. Growing, selling, and smoking pot is still a crime under federal law—something the Obama administration won’t let medical marijuana advocates forget. Despite his campaign promise to leave states alone, in October 2011, Obama’s Department of Justice sent closure orders to dispensaries throughout California. U.S. Rep. Jared Polis (D-Colo.) was outraged by the administration’s actions, telling The Huffington Post that “it makes no sense for them to waste time and taxpayer money interfering with state-legal businesses.”
 
Although a 2010 state report estimates the total value of California’s pot crop at $14 billion, the influx of new players coupled with increased federal scrutiny is putting a squeeze on the industry, forcing out some workers and compelling othersto tighten their belts. Like the gold miners who descended on California 16 decades ago, amateurs in the pot business are discovering that their economic parachute is little more than a pipe dream.
 
* * *

Christopher, the friend who helped Moldof find work, has a front-row seat for the decline. Like Moldof, Christopher is from Florida and attended UCF, recently got his master’s (in urban studies), and now works in weed in Northern California. Unlike Moldof, Christopher won’t let me use his real name or take pictures of his baby face or dirty blond hair. “I’ve got clients who might not be too happy about this,” he says, referencing his freelance web-design business.

Christopher considers his words carefully. I’m not surprised when he tells me he plans on being a college professor one day. In the meantime, the 31-year-old makes and sells hash, a concentrated resin gathered from marijuana leaves, directly to patients, often with the superfluous leaves he’ll cut away during a trimming session. (Christopher is a member of a collective, meaning he can legally provide hash to other patients.) Whereas growers used to give him bags of the leaves for free, some have started charging him nearly $1,000 in an effort to make up some of the money they’ve been losing.
 
For Christopher, Moldof, and millions of other college-educated Americans, getting a degree was supposed to lead to a better life. Christopher graduated with his master’s in 2010 and tried working service jobs—sometimes a few at a time—to support himself in San Francisco while finding a career writing about or researching urban agriculture. But work wasn’t steady, and the freelance design gigs he picked up on the side never paid enough. (Christopher has about $80,000 in student loan debt.) “I found it increasingly difficult to justify working one, two, perhaps three jobs to make ends meet and still not be guaranteed to be doing what I was actually trained for and what I love to do,” he says.
 
That’s when Christopher decided to move to Arcata, a town about 300 miles north of San Francisco in the thick of Humboldt County. A nature lover, he chose the desolate Arcata not for its booming weed business, but because of its beautiful landscape. For three months Christopher shied away from pot work, but one day he could no longer afford to. “I didn’t think my morals really jibed with it,” he says. “But I got to a point where I needed to make money, and one thing led to another.”
 
Christopher is making an ok living now, but he’s trying to get out of the cannabis trade. Not because he’s ethically opposed to it anymore, but because the work he does is mostly mindless. Unlike Moldof, for whom cannabis became a pet cause, to Christopher the pot trade is akin to a bartending gig or temp work. “I would probably give it all up right now if I found something more suited to my passions,” he says. Until then, he’s paying off some of his student debt and preparing to apply to Ph.D. programs.
 
Then again, he says that following his dreams is part of how he ended up selling hash in the first place. “The thing about people in cannabis is that a lot of them tend to do things that they care about,” he says, “which doesn’t necessarily pay well.” Pot doesn’t necessarily pay well, either, at least not anymore. Growers and sellers, the easiest barometer for the industry’s health, are hemorrhaging money. Rick Pfrommer, head buyer at Oakland’s Harborside Health Center, the nation’s largest medical marijuana dispensary, says industry newcomers have “driven the market down hugely.”
 
Brandon (not his real name) has been growing marijuana in the hilly, temperate land around Santa Cruz for five years. He used to sell the best stuff for about $5,000 per pound. “Nowadays, you’re lucky to get $3,600,” he says. “Tons and tons of people have moved here from out of state in the last few years. I think a lot of them are under the guise that it’s a get-rich-quick scheme. They don’t do it on a professional or a commercial level; they just do it to help pay the bills, and that hurts all of us trying to make a real life at this.”
 
* * *

AnnaRae Grabstein is attempting to make a real life at this. Though she’s only 30, Grabstein is the CEO of Steep Hill Lab, the country’s first marijuana testing facility. In late December when I drive to Oakland to check it out, Steep Hill has just moved its operations to a new building, a drab thing plucked from the 1970s and tucked down a quiet side street.

Grabstein bounds out of her office to shake my hand, immediately lamenting that her brown tights, linen skirt, and black cardigan aren’t more fashionable for the photographer. Otherwise, she’s cheerful, and she offers a tour of the space. Past the front desk is a boardroom with a 14-foot marble table—Grabstein tells me the room will one day hold “cultivation conferences” and consultancy sessions for growers and dispensaries looking to improve. We walk past another room with gray cubicles lining the walls, a bicycle, an employee eating pizza. It seems like a particularly hip, young dentist’s office—until I get to the lab.
 
The testing room is bright, sterile, and library-quiet. Lab technician Toby Laverty greets me in a tie-dyed coat. Although Steep Hill also does consulting, for now the testing room is the heart of the business. It’s here, amid test tubes, small baggies of pot, and intimidating machines with names like the “Agilent 1100” that Steep Hill provides more than 200 clients around California with potency analysis and screenings for molds and pesticides.
 
Grabstein says the benefits of testing are twofold: Not only do dispensaries, which occasionally buy product from strange growers, get to ensure they’re not selling pot drenched in chemicals, but also the company’s quality control rating, called the SafeCannabis guarantee, adds a new level of legitimacy to the industry. Grabstein is trying to destroy the notion that California cannabis is a free-for-all.
 

“This lifestyle was perceived to be very easy,” she says. “Unfortunately, by the time all [the newcomers] jumped on board, it wasn’t so easy anymore. It’s a different world than it was five years ago.”
 
Back in her office, Grabstein tells me she always knew she “had to do something that was important.” After getting a nutritionist’s certification and earning a degree in ecology and sustainability, she went on to work multiple jobs at charity organizations, counseling families and children on healthful eating and establishing urban gardens in Oakland. But soon she was beset by the same problems that Moldof and Christopher faced. “A big part of what I was doing was mentoring high school kids who had gone through some really hard times,” she says. “The irony was that I could hear myself trying to inspire these young people to have these big dreams and then I was going home and feeling so broke because I was not making a living wage.”
 
“Worn down” by the nonprofit world, Grabstein decided to go to business school. “I started to realize that in order to actually effect change in the way I wanted, it was really important to have a strong business background,” she says. Of course, working in some glass tower for a hedge fund wouldn’t do. Grabstein wanted to work in cannabis. Years ago she’d spent two months as a cook on a pot farm during a harvest season. The owner paid her $8,000 in cash to feed 20 trimmers who were camping out, and she says she fell in love with how “open and communal” the experience was. “People shared and it just seemed very alternative to the work environment that I encountered in a more conventional job,” she says.
 

Steep Hill’s fluorescent-lit office is a far cry from the community cookouts of Humboldt. Grabstein is still working toward that business degree, taking night classes at the University of San Francisco. In the four years since Steep Hill opened its doors, dozens of copycat testing centers have popped up, each hoping to get a piece of the growing dispensary market. Like other jobs in California cannabis, testing labs have become a microtrend. Grabstein says she plans to outlive the upstarts. “What we want to do is introduce all types of professional solutions to help the industry mature,” she says. “We want people to have the opportunities to find work in cannabis, and to have legitimate income from cannabis.” To her, it’s not a rush, it’s a life.
 
Back in Moldof’s kitchen, which is bathed in the gray light of dusk, he’s made us hummus from scratch (“The trick is adding way more water than you think is necessary”). I ask him if he thinks he’s successful. “It depends on what you mean by success,” he says, pouring more tea. Rad Reef brings in some money through record sales and an Etsy store where Moldof sells marijuana legalization awareness shirts he designed, but he worries about making rent and doesn’t eat as much as he’d like to. “I’m not able to live this luxurious life,” he says. “But I am able to get all the satisfaction I need out of life every day from the work that I do.”
 
Prognosticating about California’s pot economy is difficult because so many of the variables number of growers, number of dealers, federal enforcement plans—are unknown. But everyone seems to believe things will get worse before they get better. With millions of Americans still unemployed, the allure of tax-free weed money in California remains, so the already-shrinking pie will likely get even smaller. Some of the newcomers may stay on as professionals, like Grabstein, but many more will probably jump ship as soon as possible, like Christopher.
 
If we look to the gold rush for clues, the future may be bleak. Though few people know his name, James Wilson Marshall, a small-time carpenter, is the man who kicked off the gold rush. Marshall discovered a few small nuggets of the precious metal in a stream near a sawmill where he worked. He told his colleagues and boss, John Sutter, that he’d had the nuggets tested and they were almost 100 percent pure. After that, the rush was on.
 
Years later, like so many others, Marshall was broke—and broken down—from trying to make a living off of gold. He had started the rush, sure, but he’d never found a way to profit from it. When he died in 1885, just a few years after investing the rest of his savings in a mine that turned out to be worthless, he was probably still wondering what went wrong.
 
Moldof isn’t wasting time wondering. He’s still invested in Rad Reef, but he’s looking for a side gig to supplement what was supposed to be a side gig. He’s hopeful. “This industry is everything that this country has always stood for,” he says. “All the means for us to climb up out of the shit of life in this country have either been stripped from us or burned to ground. And the cannabis industry is a way for us to continue to survive.”
 
I wonder if John Marshall ever stopped believing that about gold.