SANTA CRUZ — Call it the year weed went straight.

Yet months before California voters approved Proposition 64 to legalize recreational marijuana, Santa Cruz County embarked on a bold strategy, instructing all pot farmers to reveal themselves and come to the fold.

And in a narrow three-month window that closed two days before the Nov. 8 election, more than 950 growers applied for licenses to get permits under a proposed ordinance that’s now in line with state law.

As a result, long-illicit businesses are now quickly being converted into legal contributors to the California economy through a new regulatory system designed to support small cultivators, bust illegal marijuana operations and turn the coastal county into a powerhouse of high-end, hand-crafted products. And what’s happening in Santa Cruz County is providing an early glimpse into how the business of cannabis — Pot Inc., if you will — will look like in many parts of California a couple of years down the road.

Santa Cruz County also hired its first cannabis czar.

Daniel Peterson, 55, who has spent his career as a water resources engineer for Yuba and Sutter counties, started in October as the Santa Cruz cannabis licensing official, overseeing an industry operating in the shadows that now has an opportunity to become legitimate.

In one of his first major decisions, Peterson recommended that Santa Cruz County supervisors extend a temporary moratorium on nonmedical use, possession and sale of cannabis for 10 months and 15 days, but they expect a progress report from staff on regulations Feb. 28.

Peterson said he wants to hold two public workshops to get input on concerns such as security and setbacks for recreational cannabis. He proposed reporting back April 13 while supervisors wanted it sooner.

“I don’t know that we want a whole set of regulations around six plants,” said Supervisor Ryan Coonerty, who proposed the earlier date.

“Unless we establish regulations, there aren’t any guidelines,” countered Supervisor Zach Friend. “It’s false to argue it’s an overregulation.”

The state is expected to issue licenses for commercial activity late in 2017.

“The county is interested in regulating those activities, particularly the storefront-commercial sale of cannabis, much like we did with medical cannabis,” said county spokesman Jason Hoppin, noting the moratorium is designed to keep storefronts from popping up in neighborhoods and around schools.

“Our moratorium mentions businesses but does not mention personal use,” he added. “You don’t need a license, but eventually you will have to comply with whatever minor regulations we enact. We’re not going after people who grow for personal use.”

In addition, Santa Cruz county voters overwhelmingly approved Measure E in November, which redefines a cannabis business to encompass cultivators as well as dispensaries.

Some 74,825 voters weighed in, with 80 percent in favor, a margin not likely to shift even though tens of thousands of ballots have yet to be counted.

If approved, a 7 percent tax on gross receipts would apply to cultivators, said Daniel Peterson, the county’s cannabis licensing manager.

Reporter Lisa M. Krieger contributed to this report. This article was first published at