Doubt the Drought? Rules For Thee but Not for Me

By Adina Flores, May 11, 2023

In recent years, Californians have been instructed by Governor Newsom to conserve as much water as possible due to drought conditions. The question at hand is if this same advisory applies to individuals across the board.

According to a 2021 confidential investigative report compiled by Insight Group, Inc; stakeholders within the County of Sonoma expressed grave concerns regarding the possibility of illegal water hauling.  At a time when the general public was being told to destroy their lawns, not plant vegetable gardens and keep their swimming pools empty, they remained on high alert. The Insight Group office was initially contacted regarding the presumption that city water was being stolen and delivered to unknown marijuana gardens. Investigators observed on numerous occasions that a large water truck was utilizing a city hydrant as its supply and delivering to the Petaluma area. Per the report, the water truck driver was witnessed emptying his truck at Sonoma Hills Farm, Petaluma. The photographs included within the report include a water tank which appears to be engraved with the Petaluma Creamery logo. Just last year, a local community activism group sent a well researched letter to the Sonoma County District Attorney, Jill Ravitch.

Segments from the letter included the following:

City Water Illegally Being Diverted to Cannabis Cultivation Sites

“Dear Ms. Ravitch:

We have been tracking misappropriated water deliveries to cannabis cultivation sites in Sonoma  County since last summer. These activities violate the county cannabis land use ordinance (§ 26- 88-254(g)(10)), city ordinances (e.g., Santa Rosa’s ordinances § 14.20.020 and § 14.20.040), and  state waterboard regulations (attached Waterboard Drought Flyer). No one in city or county  government who we have contacted seems willing or able to do much of anything about this. The  fact that the violations concern at least two cities, the county, and state regulations suggests that  your office is the most appropriate entity to investigate, and, if appropriate, pursue charges. The  balkanized nature of the violations creates difficulties for other agencies to enforce the law.  

As you know, Sonoma County and California are experiencing what some say is the worst multi year drought in a millennium. Recently, the Press Democrat published a story by Mary Callahan  about water rights cutbacks in the Russian River for ranchers, grape growers, tribes, landowners,  and community water suppliers.

Petaluma’s website has a vast array of water restrictions, including outdoor watering only twice a week; no use of potable water for washing sidewalks or vehicles at home; no filling of new or existing pools; no planting of landscapes that require water. Rohnert Park’s website announces  “mandatory water conservation,” and asks residents to do more to reduce water-use. Santa  Rosa’s website asks all residents, businesses, and visitors to reduce water use by 20%. 

Last summer our members observed flagrant and massive water diversions in Santa Rosa and  Petaluma. Huge tankers filled up at city hydrants and delivered city water to cannabis cultivation projects. This both violates several laws and flies in the face of demands to residents to reduce  water usage.

Petaluma

The September 4, 2021 Insight Group Report (attached) contains 16 photographs showing  water being pumped from city hydrants into a truck marked “Petaluma Creamery” and delivered  to Sonoma Hills Farm at 334 Purvine, a cannabis operation. This report identifies the current owner of the truck as Scott Nelson, a prominent Petaluma businessman. Another attached report Illegal Water Hauling in Petaluma Dairy Belt (October 2021) by Sanjay Bagai shows Mr. Nelson’s truck hauling water to cannabis grows at Valley Ford Farms LLC, 1400 Valley Ford Freestone Road, Bodega (pp. 11-14) and Diggit Gardens LLC, Potter Family Farms LLC, Rain Gardens LLC, Wild Heart Farms LLC at 4835 and 3803 Springhill Road, Petaluma (pp. 15-21). 

Mr. Nelson’s Petaluma application form (p. 4, attached) states the destination for the water was  to be 3420 Primrose Lane, Santa Rosa, and was to be used for “home” and “livestock” use. That  address is neither a farm nor a ranch, but rather a residential property in a subdivision. We  understand from Petaluma City Manager Peggy Flynn (attached) that the City of Petaluma became alarmed at Mr. Nelson’s activities and stopped him from receiving more water in June  2021 because they learned he was delivering it elsewhere. Mr. Nelson’s statement on the water  application form was no accident or mistake. The form clearly states (p. 4) that the water cannot be resold. In view of the information that we have received, we think this constitutes fraud. 

According to the information that Petaluma provided us, Mr. Nelson received 34,230 cf of water  in May 2021 and 43,340 cf in June 2021. Water meters measure water in cubic feet (cf), and a cubic foot is 7.48 gallons. It is a simple math exercise to determine that Mr. Nelson received  256,000 gallons of Petaluma water in May and 324,000 gallons in June 2021. After receiving this  water usage information, Jordan Green, Assistant City Attorney for Petaluma, informed us that it was provided by mistake and should not have been disclosed. We think law enforcement authorities should have this information to evaluate this situation. You have the legal tools to  obtain the water records of any permit holder. 

We understand from Mr. Green that the City of Petaluma contemplates no further action against  Mr. Nelson. The city apparently considers suspension from receiving water a sufficient penalty, and Petaluma has no interest in pursuing him for changing his water source to another city. Petaluma may have no authority to do so, but your office has such authority. 

Santa Rosa

Once Petaluma stopped allowing Mr. Nelson to haul water from its hydrants in late June 2021, he switched to Santa Rosa. So far as we can tell, he has not used Rohnert Park water. As the photographs in the reports show, Nelson used the Petaluma Creamery truck (capacity about  3,500 gallons, we believe) to haul water from Santa Rosa city hydrants to cannabis operations in  the dairy belt during August and September. As previously mentioned, this violates the Santa  Rosa city ordinance, the Sonoma County Cannabis ordinance, and state water board regulations.  We suspect he also hauled water to cannabis cultivations during July and October. Santa Rosa  has refused to provide us water usage information, but we believe that you can obtain it. Without  a governmental agency undertaking an investigation, the extent of the water misappropriation will remain unknown.

In a different misappropriation in Santa Rosa, water was pumped from a Santa Rosa hydrant at 699 Scotland Drive, Santa Rosa, and transported to 2260 Los Alamos Road. This is a cannabis cultivation operation owned by Patrick Bransford that is called Castle Rock Ridge, Inc. Beginning in June 2021, numerous eye witnesses on Scotland Court saw a white pick-up truck with a water tank on a trailer and an additional tank in the bed draw water using a “construction meter” from a hydrant at the corner of Scotland Drive and Scotland Court. 

Water was taken daily, often multiple times a day. Kent Matowitz, who lives nearby, observed this activity. He followed the pickup truck on Los Alamos Road and watched the driver open the  gate and turn onto Weeks Ranch Road (a private road so he could not follow). This is the  entrance to the cannabis operation at 2260 Los Alamos Road. Mr. Matowitz contacted Peter  Martin, Deputy Director of Santa Rosa’s Water Resources, regarding this issue in September  2021. Instead of investigating, Santa Rosa officials immediately alerted Dennis Baker at Wolff  Contracting, Inc. who had the temporary Construction Water Permit (attached). The white pick up truck then ceased drawing water from this hydrant and hauling it to the cannabis operation. We do not know whether the hauler switched hydrants, because Santa Rosa refuses to provide  such information. The permit states that the use is for “construction,” not cultivating marijuana, and the temporary permit is titled a Construction Meter Permit. The owner of the parcel and cannabis operation at 2260 Los Alamos Rd stated at the November 2, 2021 public hearing for  approval of his cannabis use permit that although his home was burned in the 2020 Glass Fire, he  had not started reconstruction. Mr. Baker’s statements as to the use of the water was no accident or mistake. It was a fraud. 

The Weeks family owns a 526-acre ranch on Weeks Ranch Road (2250 Los Alamos Rd), and the  trucks with the water tanks had to go through their property to reach the Castle Rock Ridge grow site. They might be able to provide additional information, but no public official had a sufficient  interest in this issue to ask them. 

The eye witnesses contacted Permit Sonoma and the Agriculture Department, who administer the cannabis program. The Agriculture Department was assigned to investigate. Daniella Reagan, Deputy Agricultural Commissioner, told Mr. Matowitz and Dr. Eppstein, another neighbor, that unless they catch the grower red-handed, they will not pursue this. Given the agency’s estimated  response time of at least an hour after any report, that is impossible. County officials said that eye witness accounts and photographic evidence at hydrants and on public roads leading to cannabis grows is insufficient evidence to instigate an investigation despite the apparently immense amounts of unauthorized water that were delivered. The Agriculture Department  inspected the site on September 29, 2021 and observed that there was still water in the pond during the severe drought (very unlikely without water deliveries). They did not observe water being trucked for use in cannabis cultivation while inspectors were on site and they refused to  test the water to confirm whether it was surface water or city water. Inspections are scheduled to  alert growers to prepare for them, so growers can easily avoid engaging in illegal activities when  the inspectors are present. The Agriculture Department then invented excuses for the water deliveries, suggesting that it was for firefighting. This statement is not only ridiculous, it reveals  a credulous attitude that is inappropriate for a regulatory agency whose primary duty is to protect the public. At one point the Agriculture Department suggested that the interested public might  trespass on the property to obtain photographs of the trucked water being offloaded. 

The County Board of Supervisors also ignored this documented information on illegal water hauling for two of these cannabis operations, ignoring public letters and statements from eye witnesses and instead taking the grower’s word that nothing illegal had been done. The Supervisors approved another three years for the permit at 334 Purvine Road, and approved a  five-year permit for the cultivation site at 2260 Los Alamos Road. 

In 2021 and continuing this summer tens of thousands of residents have abandoned lawns or vegetable gardens. Many are taking fewer showers. They do not undertake such sacrifices in  order to enable cannabis operations to violate the law and use city water to support poorly chosen cultivation sites that lack sufficient on-site water. 

To protect the integrity of the use of Sonoma County water, a message needs to be sent to violators that they will suffer serious consequences. In the current situation, the failure to take  serious action against Mr. Nelson and Mr. Baker, as well as the growers who paid them, encourages others to take advantage of weak enforcement. What is the downside for the culprits? If they are caught, they switch to another of the county’s nine cities. What we are reporting may be just the tip of the iceberg for the cannabis industry.”

According to his LinkedIn profile, Mr. Samuel Magruder is a Co-founder and Head of Real Estate/Business Development at Sonoma Hills Farm. He is also a Partner/Advisor to BigRock Partners LLC, a strategic advisory firm working with companies and investors, focused on the intersection of food, hospitality, and cannabis. Per the Sonoma Hills Farm website, Mr. Mike Harden is referenced as a Founder, Chief Executive Officer and Ms. Shauna Harden is detailed as a Founder, Executive Producer. Mr. Harden also happens to be a Founder/Partner at Big Rock Partners while Ms. Harden is indicated as the Principal. The BigRock portfolio of clients includes some familiar brand names within Sonoma County such as Cannacraft and Garden Society. Most notably, Governor Newsom’s PlumpJack Group is indicated as a client.

Cannacraft was recently featured in the California Globe article “Cannabis Cartel: Weeding out Local Farmers.”

“As of December 2022, Santa Rosa-based Sonoma Lab Works has officially closed their doors. Just before Christmas, employees were laid off with virtually no notice. According to Green Market Report, “the lab’s owner, businessman Darius Anderson, could not immediately be reached for comment.” Mr. Anderson has been referenced in the Globe as having a tight knit bond with Governor Gavin Newsom.

Kenwood Investments, owned by Mr. Anderson, is the parent company to Sonoma Lab Works. Per the LinkedIn profile, Sonoma Lab Works started in 2014 as part of CannaCraft. In 2018, it was taken over by a new owner to be compliant with the state’s transitioning cannabis licensing program. Darius Anderson’s brother, Mr. Kirk Anderson, happened to be the Chief Operations Office of Cannacraft from 2016-2018. It is uncommon to operate a facility which conducts both the manufacturing and licensing of cannabis products under one roof. As of May, 2022, the County of Sonoma has selected Ms. Kathy Parnell as the new Assistant Auditor-Controller-Treasurer-Tax Collector. This was curious since she was the former Vice President, Treasurer to CannaCraft. The smaller cannabis farmers and retailers who have been denied permits and/or product licensing may be concerned about these overlapping connections.”

According to the Neighborhood Coalition Sonoma County, “Sonoma County has succeeded in rapidly accelerating cannabis permitting by issuing ministerial Zoning Permits (ZP), cannabis permits that violate Sonoma County’s cannabis ordinance. Instead of benefiting small family farmers, purportedly the group Sonoma County Supervisors want to encourage, the County’s actions have in its place benefitted large cannabis operators such as CannaCraft and SPARC“.“CannaCraft and SPARC, large corporate cannabis operators, are two examples of egregious violators of state and local laws. CannaCraft and SPARC have obtained multiple large scale permits under different LLCs and corporate names, which all are directly connected to their businesses. These issued permits violate both County regulations prohibiting more than one acre of cannabis cultivation per person, and the prohibition against ministerial permits for more than 10,000 square feet of outdoor cultivation on any one parcel.” There were 63 ministerial cannabis permits Sonoma County issued in 2021 (through August 28, 2021). Of those permits, 28 of the cannabis permits were pulled by CannaCraft related business entities.”

Garden Society (dba Old River Road), a client of the BigRock portfolio, has also been under hot water. The cannabis company was founded by Ms. Erin Gore, Sonoma County Supervisor Gore’s sister-in-law. The registered agents for Old River Road have included both Erin Gore and Supervisor Gore’s brother-in-law, Jake McKee. Mr. McKee was previously appointed to the County of Sonoma Fish and Wildlife Commission by his own brother-in-law, James Gore. While serving on the commission, he did not disclose that he is a partner to Wayfinder LLC, a California land use consulting company. Their major projects include: cannabis cultivation, manufacturing, and retail applications. The Commission oversees matters including cannabis drone surveillance, and protecting the natural habitat which could essentially be used to create bias when approving permits or taking enforcement action. Tyra Harrington, head of code enforcement for Permit Sonoma, has repeatedly given approval for Mr. Mckee’s requests. Just last fall, the City of Santa Rosa Code Enforcement Officer, Kelley Aboudara was arrested for extortion. Oddly enough, Ms. Aboudara previously shared the same residential address as Ms. Virginia Rahmn, Sonoma County Supervisor Gore’s grandmother. Ms. Harrington has been at the epicenter of the public’s complaints, as it appears that the County is hand selecting who receives permits based on their personal network and ulterior motives.

As referenced from CB Insights, Governor Newsom’s PlumpJack Group utilized BigRock as an investor. Sonoma Hills Farm Vice President of Cannabis Cultivation and Production, Mr. Aaron Keefer, happens to be the former Manager of Gardens and Grounds / Farmer for Thomas Keller Restaurant Group (The French Laundry). The people may inquire if Mr. Keefer perhaps holds any relation to Governor Newsom’s controversial “French Laundry” dinner. While advising Californians to stay home during the pandemic, Newsom was photographed at a large super spreader event with well-connected lobbyists. Because PlumpJack falls under the hospitality segment of BigRock’s services, one may inquire what future endeavors are planned between the dual entities.

The Petaluma Creamery water truck may be attributed to the current owner, Scott Nelson, Principal of COAST COUNTIES CONSTRUCTION LLC / SCOTT NELSON TRANSPORT, LLC. Mr. Nelson’s immediate family is no stranger to the construction industry. Mr. Pat Nelson is the Principal of PAT NELSON CONSTRUCTION, INC. This particular construction company has been regularly utilized by the County of Sonoma, City of Rohnert Park and the Sonoma-Marin Area Rail Transit District (SMART) to complete major government backed projects. According to the 2020 General Manager’s report produced by SMART, The City of Petaluma / Pat Nelson Construction were granted entry permits to complete water pipeline work. The connection to SMART was interesting given that Sonoma County Supervisor Chris Coursey was the longtime public spokesperson for the District, and currently serves on the Board of Directors. Former Congressman Doug Bosco was a key investor for SMART, and played a central role in the negotiations for the easement sales. Mr. Bosco is a Santa Rosa attorney and Chair of the California Coastal Conservancy. He also happens to be Co-Owner of Mr. Darius Anderson’s Press Democrat media publication, and is the current General Counsel to Mr. Anderson’s Sonoma Media Investments. Being that Mr. Anderson is a long time lobbyist for Gavin Newsom and colleagues, the public may be curious as to their personal interests in siphoning water from restricted areas.

Questions have arisen as to how and why Mr. Nelson purchased the Petaluma Creamery vehicle, as Mr. Larry Peter is the creamery’s owner and longtime resident to the City of Petaluma. A 2021 article published by the Bohemian Newspaper stated:

“over the past 20 years, Peter has racked up complaints with city, county and state regulators, and often failed to fix problems in a timely fashion”. “Instead, Peter and his attorneys often cite his central role in the North Bay’s historic dairy industry and his business’s financial struggles as a reason regulators should go easy on him.”

“For a long time, Peter’s strategy seems to have worked well enough, but, as the Bohemian reported last month, Peter’s time running the historic Petaluma Creamery may be coming to an unceremonious end.”

“In a Feb. 5 letter to Peter, Flynn stated that the city is still considering placing a lien on the Creamery to collect some of the business’s unpaid water use fees and fines, which city officials say total $1,425,258. On Friday, Feb. 19, Flynn told the Bohemian ‘we are working with the Creamery to gain compliance and that effort continues. There have been no extensions granted, and the February 28 deadline currently stands.’”

“Over the past 20 years, Peter’s dairy business, located on Spring Hill Road in Southern Sonoma County’s dairy-heavy Two Rock area, was under scrutiny by Permit Sonoma, the county’s building code enforcement agency, for over a decade, and raised serious concern from a regional water regulator.”

“Between 2001 and 2004, inspectors with Permit Sonoma opened a series of investigations about the state of Peter’s property. The range of alleged code violations included operating a creamery out of an unpermitted building, burying trash on the property, completing grading work without a permit and installing a handful of unpermitted buildings to house workers and host visitors on educational tours.”

While the Petaluma Creamery appears to be actively operating, the public may be curious as to the final resolution reached by the County and City. The Creamery cemented a deal with the City to pay $500,000 in fines with the understanding that they could remain open under regular supervision. What was the ultimate connection between the water trucks and the various aforementioned individuals and entities? To this date, the County’s District Attorney Office refuses to investigate any complaints from the public regarding extortion and special privileges under the jurisdiction of Permit Sonoma.

As stakeholders in the community have vocalized, is Governor Newsom perhaps networking with local and state level elected officials to support his own business endeavors? Is California truly in a drought, or is this a hoax to shut down competitors within the agricultural industry?