Cannabis cultivation at NatureSweet site to be decided by voters

The fate of a possible commercial cannabis cultivation site located in a former NatureSweet greenhouse in Bonita will be decided by voters in November.

Group that successfully gained signatures possibly fueled by dark money

By Jon Johnson

BONITA – After more than a year since the Graham County Board of Supervisors (BOS) approved a rezone for a commercial cannabis grow operation at the NatureSweet site in Bonita, voters from all of Graham County will decide if the farm will be allowed.

On Thursday, the State of Arizona Court of Appeals Division Two confirmed an earlier trial court’s decision to deny an effort to discount a referendum to allow the voters of Graham County to decide if a cannabis cultivation site will be allowed on the site of a NatureSweet greenhouse in Bonita. The referendum will be on the November 2022 General Election Ballot.  

During a historic BOS meeting on June 21, 2021, the supervisors approved a zoning request change from Bayacan, LLC, to rezone two greenhouses at NatureSweet’s facility in Bonita to allow for cannabis cultivation by a 2-1 vote, with Chairman Danny Smith – whose district encompasses the area in question – casting the lone opposing vote. The rezoning would change the area from General Land Use Certification to Unlimited Manufacturing. 

At the conclusion of the five-hour meeting in June 2021, Smith said while he appreciated the effort put forth by NatureSweet and Bayacan, he didn’t feel the concerns of the area’s residents were adequately addressed. 

“I have a really hard time telling the people that have to live next to this for their real and perceived impact on their lives to pound sand and live with it,” Smith said. “I would still rather see some sort of agreement that didn’t have such an impact on the surrounding neighborhood.” 

Jon Johnson File Photo/Gila Herald: BOS Chairman Danny Smith cast the lone dissenting vote regarding the zoning change for Bayacan.

Dark money from the referendum group?  

The approval from the BOS prompted a group called “Respect The Will Of The People: Graham County Voters & The Arizona Public Integrity Alliance Encourages A No Vote On Massive Marijuana Expansion In Our Area,” to seek signatures for a referendum on a decision by the Graham County Board of Supervisors (BOS) to rezone greenhouses at the NatureSweet site in Bonita to allow for the cultivation of cannabis. The group beat an Aug. 5, 2021, deadline and turned in 2,288 signatures, according to Graham County Elections Director, Hannah Duderstadt.

At the time, Bayacan Inc. attorney Heather Dukes advised that a complaint to the petition signatures would be filed in an effort to keep the referendum off the ballot.

A random sample of 113 signatures turned in showed 23 to not be qualified electors for a roughly 20 percent failure rate. However, since the group turned in more than twice the required 1,064 signatures, Graham County Recorder Wendy John certified the signatures on Aug. 23, 2021, and Duderstadt acknowledged a final receipt of the valid signatures, allowing the referendum to be placed on the November 2022 General Election Ballot. More than 13,650 people voted in Graham County in the November 2020 General Election.  

“The number of valid signatures filed with this petition, based on the random sample, appears to be at least 100 percent of the minimum required or through examination of each signature has been certified to be greater than the minimum required by the constitution,” Duderstadt wrote in her receipt of valid signatures.

The Chairman of the PAC leading the referendum effort, George Khalaf, who is Attorney General Mark Brnovich’s campaign consultant, has recently been named in investigations regarding dark campaign money. Two PACs, “Put Arizona First” and “Securing Arizona” reported receiving their funding from two California companies. However, an investigation by the Arizona Republic’s Richard Ruelas found that the California companies not only had never donated the vast sums of money reported – more than $2 million in the “Put Arizona First” PAC – they had never even heard of the candidates (including governor candidate Kari Lake) they were supposed to be supporting.   

Khalaf has been linked with the “Securing Arizona” PAC, which spends most of its money at his consulting firm The Resolute Group. While the $2 million from the “Put Arizona First” PAC was spent at the firm 1Ten, owned by Rep. Jake Hoffman, of Queen Creek, who was one of Arizona’s “fake electors” who claimed a victory for Donald Trump in the state, according to reports. 

Additionally, Khalaf’s father, Youssef Khalaf, who served as treasurer for the Graham County referendum effort, also serves as treasurer for the “Put Arizona First” PAC and as treasurer for Kari Lake’s candidacy for governor. The true sources of the two PACs’ contributions have yet to come to light.

Possible tax fallout    

Not allowing the cultivation site could adversely affect residents of Graham County tax-wise. At the June 2021 BOS meeting, Kip Kempton said the possibility of losing the NatureSweet tax base would put the county in a tax crisis and cause every other business and residential property taxes to increase as NatureSweet currently accounts for 20% of the county’s property taxes. However, if the cultivation site is allowed, Bayacan and NatureSweet together would then represent 23% of the county’s property taxes. 

If the rezoning ultimately goes through, NatureSweet is expected to sell its greenhouse Site 6 to Bayacan Inc., which will utilize the site to grow medical-grade cannabis. The operation will only include the cultivation of the plant and harvesting of its fruit, with no processing or sales taking place at the site. A second greenhouse, Site 5, was also included in the rezoning, and Bayacan may purchase that at a later date to expand its operations. 

For its part, the diversification of the greenhouses will allow NatureSweet to create a world-class research and development facility at its greenhouse Site 1 with a possible later expansion into Site 2. NatureSweet’s greenhouses at Site 3 and Site 4 will still be utilized for tomato cultivation, along with possible other agriculture products, according to previous statements from NatureSweet.

While the rezoning has the support of the business and education community, with both the Graham County Chamber of Commerce and Eastern Arizona College on board, as well as several prominent local business owners. 

Opposing the rezoning are farmers and residents of the area who have previously cited moral reasons, and concerns over the possible smell and additional traffic affecting where they live and work. 

One of the main families against the zoning is the Fleming family, who breed horses at their Fleming Thoroughbred Farm, which is the closest facility to Site 6. The Flemings believe that cannabis cultivation will be detrimental to their business due to the horses being able to smell the cannabis. They and others also were concerned that residential property values would be lowered and suggested that Bayacan instead build a new facility closer to the Safford area or somewhere “out in the middle of nowhere”. However, the Bonita area is an agricultural area and a similar crop has been historically grown at the greenhouses for nearly 30 years.