When news spread that more than 30 California marijuana farms were destroyed by wildfires, concerned friends of the farmers immediately decided to help those in need by creating a crowdfunding campaign. But the philanthropic effort was shut down because of legal confusion.
Hezekiah Allen, executive director of the California Growers Association, decided the best way to help the growers was to set up online fundraiser on the YouCaring.com site. Allen set the goal at $25,000 and donations poured in. More than $13,000 was raised before the site on Monday morning suspended the efforts.
According to a report on CNN.com:
YouCaring said fundraising for marijuana-related purposes isn’t allowed by its payment providers, WePay and PayPal.
“Our payment providers are 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,” said YouCaring’s Camelia Gendreau in a statement.
Because it’s illegal on the federal level, processing payments related to marijuana is technically considered money laundering. “We have no other choice,” said WePay’s Jeremy Milk.
On the YouCaring donation page, Allen hoped to give the growers a fighting chance as California’s legal recreational cannabis program gears up to begin retail sales in January. He launched the recovery fund promising that 100 percent of the donations would be used for disaster relief.
“Severe wildfires have taken lives, destroyed homes and businesses, and continue to threaten communities throughout our state. Eventually the smoke will clear and we can begin to assess the damage,” Allen wrote. “For now, we can confirm that several growers have been among those in the community impacted by the dual loss of home and livelihood.
“The opportunity of legal cannabis is in ashes for many longtime California growers and their communities. Over the course of the last 18 months, these growers have spent their life savings getting permits and preparing for state licenses,” he continued. “Recovery will be especially difficult because cannabis is a dramatically under-insured crop, growers can’t get loans and won’t qualify for federal recovery funds.”
WePay claims it can no longer process the payments because cannabis remains a Schedule 1 drug under federal law and that banks, which are federally regulated, are not permitted to accept the money.
Wineries and vineyards damaged by the wildfires are free to accept donations. Cannabis farmers, on the other hand, are flat out of luck.
California’s cannabis industry was estimated to be worth $2.8 billion in 2016, according to Arcview Group. With retail sales starting next year, the industry in the state is forecast to be worth $6.5 billion by 2020.