Why Is Desert Hot Springs California’s Emerging Center of Corporate Cannabis?

When most people think of cannabis cultivation in California, they imagine a bucolic setting in the northwestern hills, with back-to-the-land cultivators tending tiny plots deep in the woods. That is indeed where the business originated, but, as noted and the previous GeoCurrents post, such artisanal growing is rapidly disappearing. The emerging center of the industry is as different as could be imagined. It is found in the scorching Coachella Valley of Southern California, where cultivation is carried out in nondescript industrial facilities scattered across a suburbanizing desert landscape. Although other parts of California, particularly Santa Barbara County, produce more cannabis, the Coachella Valley is becoming the focus of corporate cannabis — and corporate production is overwhelming the family-farming sector.

Like the tiny farms of the Emerald Triangle, these operations are suffering from the collapse in the wholesale price and are likewise finding it difficult to compete with large-scale illegal cultivation. But they also bear much of the blame for the oversupply that has undermined the legal cannabis market. As will be explained in a later post, they are also anything but green, coming as they do with a gargantuan carbon footprint. The current post takes on a much more straightforward topic: why has the little city of Desert Hot Springs emerged as such an important center of marijuana production?

The answer appears to be straightforward. The leaders of Desert Hot Springs made an explicit decision roughly a decade ago to make their city the most cannabis-friendly jurisdiction in California. As noted in the Wikipedia article on the town, “Desert Hot Springs was the first city in Southern California to legalize medical marijuana cultivation and has since been overwhelmed by marijuana developers and growers.” Desert Hot Springs has an entire business park devoted to industrial-scale cannabis production, and advertises it widely. A real-estate website focusing on this kind of development outlines the situation nicely:

Morongo Business Park is a master planned cannabis business park located in the light industrial district of the city of Desert Hot Springs, CA. At full build-out, it will feature over 200,000 SF of cannabis cultivation, manufacturing, processing, distribution, and non-storefront delivery. Phase Three has an approved conditional use permit (CU21-17) for 136,173 square foot building, which meets all requirements for CA state cannabis business licensing. Being the first city in the state of California to allow recreational cannabis operations, Desert Hot Springs is one of the most cannabis business friendly environments in California. The city has recently reduced their cultivation tax and have also eliminated city manufacturing tax. Call listing office for complete due diligence package.

 

Desert Hot Springs turned to cannabis after everything else had failed. In the mid 20th century, it was a thriving little town, noted for its boutique hotels, modernist architecture, and sulfur-free hot springs. But it failed to keep pace with the nearby resort community of Palm Springs, and subsequently experienced pronounced decay. In 2001, Desert Hot Springs filed for municipal bankruptcy. It simultaneously earned a reputation for crime, violence, and prostitution. Widely circulated rumors claim that the city intentionally opened its doors to convicted sex offenders who were being hounded out of other communities. I have found no evidence of this allegation, but Desert Hot Springs does have an inordinate number of sex offenders living within its boundaries. By 2009, the situation had become so worrisome that the city adopted a tool that would allow its residents to locate the homes of such individuals. According to a news report from that year:

There are currently 69 sex offenders living in Desert Hot Springs, according to KESQ Channel 3. The station reported that Desert Hot Springs is the first city in the Coachella to invest in the OffenderWatch, which has been around for about 10 years. Parents can conduct a computer search around schools, gyms, parks, day cares and homes to see if a sex offender lives nearby. Residents can also register addresses within the city, and the Web site will automatically monitor the address and send an e-mail alert if an offender moves to the area.

Not surprisingly, Desert Hot Springs developed an unwholesome reputation, which is readily evident in on-line discussion forums. In 2009, City-Data published the following conversation:

Question: I want to move from Connecticut to Riverside County to be near family. Is it safe living is Desert Hot Springs? The house prices are very appealing to me. Also, how are the school ratings?
Answer 1: NO, no and no. DHS is notorious for high crime, paroled felons, sex offenders and general blight. Home prices reflect the state of the city, which is just terrible. Recent budget cuts are taking police officers off the streets when there already aren’t enough to go around. Not a place for families trying to raise good, educated kids.

Answer 2: No. The houses are cheap for a reason. The area has the highest concentration of paroled offenders. Horrible City government. Terrible schools

To emerge from the hole in which it found itself, Desert Hot Springs turned to corporate cannabis. This experiment has been relatively successful, although more than twenty-five percent of its population remains below the poverty level. As the city’s official website notes, crime has declined significantly since 2015. Desert Hot Springs is currently experiencing substantial growth, its population expanding from 25,938 in 2010 to 32,512 in 2020.

Industrial-scale cannabis has undoubtedly brought benefits to the city. Its effects on the environment, however, are another matter altogether, as will be explored in the next GeoCurrents post

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