California’s $21 billion cannabis economy is reeling from likely more than a billion dollars in crop losses related to the deadly wildfires sweeping through the cultivation heartlands of Mendocino, Sonoma and Napa counties this week.

Compounding the losses is the cannabis industry’s legal status: Though sanctioned by California and other states, its product remains an illegal drug under federal law. Unlike wineries, cannabis farmers generally cannot obtain crop insurance. Those that do get insured pay high rates for skimpy coverage. Cannabis businesses are also not eligible for federal disaster relief.

Up to one-third of the annual outdoor cannabis crop in Mendocino and Sonoma counties could be destroyed or damaged as wildfires continue to burn in Northern California. Crops that survive the flames may be damaged by the smoke.

“We’ve been watching the community come apart at the seams,” said Kevin Jodrey, who runs an annual cannabis competition called the Golden Tarp in Humboldt County. In conversations with wholesale cannabis buyers across the state, double-digit percentages of the annual outdoor harvest are assumed lost.

Tawnie Logan, chair of the Sonoma County Growers Alliance, saw a $2 million crop in a Santa Rosa greenhouse reduced to ash Sunday night. “There’s no way for them to recover the millions in anticipated revenue they just lost,” she said. “It’s gone. It’s ashes.”

According to county surveys, the number of cannabis gardens in Sonoma County might be anywhere from 3,000 to 9,000. Revenue from cannabis is unknown but likely total in the hundreds of millions of dollars annually in the county, and Santa Rosa had emerged as the epicenter of the modern legal pot economy in California.

“I had one conversation today where the family was in tears, saying, ‘We don’t know how we’re going to make it to January, let alone next planting season,’” said Hezekiah Allen, executive director of the California Growers Association.

He said the fires have resulted in “the worst year on record for California’s growers.”

Many farms also had all-cash savings on-site because of banking limitations on cannabis commerce, said Josh Drayton, communications director for the California Cannabis Industry Association. “I know we definitely have multiple members that have lost their homes and have lost their savings.”

Ben Bradley, CCIA’s operations director, said dozens of CCIA members have lost crops and homes in the marijuana commerce epicenters of Sonoma and Mendocino counties.

At least 21 CGA members have lost their entire farms in the blazes burning near Santa Rosa, Mendocino County’s Redwood Valley and beyond. “This is going to leave a deep scar,” Allen said.

The fires could not have come at a worse time for many producers, as the annual outdoor harvest season was in full swing and many farmers intended to pick their crops through the end of the month.

The rest of the cannabis supply chain has suffered, too. The fires have leveled seed sellers’ properties, storage warehouses and oil extracting facilities.

Much of the industry in Sonoma and Mendocino counties was also in the process of seeking local and state licensing to enter the recreational-use market in 2018. Operators had been spending tens or hundreds of thousands of dollars for things like water permits and leasing warehouse space that is now rubble.

“It’s going to be a fatal blow for quite a few of those people that went through all the trouble and challenge to be legitimized,” said Tim Blake, who runs the Emerald Cup cannabis competition from Laytonville in Mendocino County. “They hadn’t had a chance to sell their crops and now they’re losing their home. Where do they even go?”

Although many operators are still in danger, relief efforts have begun across the state. The CGA is coordinating donations to Mendocino County relief, and the 140-employee CannaCraft marijuana processing plant in Santa Rosa is hosting and feeding 200 Red Cross staff for the next five weeks.

Losses are expected to climb as the fires continue to rage through the weekend. “This isn’t going to stop until the rains come down,” said Jodrey.

On Friday, the National Oceanic and Atmospheric Administration forecast a 30 percent chance of rain in about five days. Meanwhile, new evacuations were being ordered in Santa Rosa, and Sonoma faced ongoing threats and evacuations as well.

“We have a lot of people who have lost their farms in the last 36 hours — and their homes,” said Logan. “We’ve got about 30 percent of our farm still sitting out there —just covered. It’s going to be tough. All of our product is covered in ash and soot and billows of smoke.”

Smoke destroys the value of cannabis and makes it more susceptible to disease, leading to unhealthy levels of mold, mildew and fungus.

“Especially when it’s ripe — I can tell you from personal experience, wildfire definitely will make your cannabis have a smoky flavor to it, just like (it would to) wine,” Kristin Nevedal, executive director of the International Cannabis Farmers Association, based in the Humboldt County town of Garberville, said in an interview last month.

Leading San Francisco dispensary SPARC was preparing to harvest its outdoor crop Tuesday. Early Monday morning, SPARC’s farm in Glen Ellen sustained major damage from the Nuns Fire, director Erich Pearson said. “The whole thing was on fire,” he said.

Wednesday he said, “There’s no fuel left. You see a stump burning and there’s nothing around it, so we leave it,” he said.

Further north in Mendocino County, the cultivation-rich Redwood Valley remained on fire Friday, with 34,000 acres burned and ten percent of the Redwood Complex Fire contained as of the afternoon. Redwood Valley is a hotbed of multi-generational, mom-and-pop craft cannabis cultivators. Thousands of them live and work gardens in the rugged, remote hills. The fire has downed communications systems and cut off residents from the outside world.

“So many people have their livelihoods where they live. Here, people lost everything — homes and livelihoods — in one fell swoop,” said Amanda Reiman, a Redwood Valley resident who is the vice president of outreach for the cannabis company Flow Kana.

“Some of our neighbors up the road didn’t make it out in time,” reported Redwood Valley music group MendoDope on its Instagram page.

“A lot of people had crops in their barns and hadn’t sold anything yet, because everything is selling so slow,” Blake said. “This is beyond anything I’ve seen in my life.”

A noted cannabis breeder and seed seller who goes by the name of Subcool reported Tuesday losing his home, seedstock and source plants used to make cuttings, called “mothers.”

Subcool’s colleague reported on Instagram that he refused to leave his farm. “With flames soaring in the air he yelled, ‘Come get me. Here I am.’” Sheriffs reportedly had to escort him away.

Another farm, Sonoma County Cannabis Company, sustained major losses, according to multiple reports. “There are no words right now to describe the loss, the heartbreak and the trauma that our beloved home and community is going through,” the company posted to its Instagram account. “We are trying to save what we can.”

Major Santa Rosa cannabis manufacturer CannaCraft closed its 110-employee business Monday but reopened Tuesday with a skeleton crew working amid “awful” air quality, said spokeswoman Kial Long. All employees are accounted for, but losses have been felt companywide.

“We have no employees that were not impacted in some way or another,” Long said. “A lot of family, a lot of friends and a few employees did lose their homes.”

CannaCraft pledged to give $40,000 worth of medicine to affected patients and donate a portion of sales proceeds to benefit Red Cross relief efforts in the area.

The cannabis community has decades of experience taking care of its own, said Blake. “We’re resilient. The thing about cannabis people is we’ve had our asses beat so many times. With the federal raids, robbers, crop failures — we’ve gone through so much of this. People will survive and go on and we will support each other and find a way to do that.”

Even with the record crop losses, California as a whole promises to deliver a record cannabis harvest to consumers in 2017, Blake said. Humboldt County remains warm and sunny, with record harvests coming in. Monterey County and the southern California desert cities are also flooding the market with A-grade product.

California’s cannabis economy is too vast and dispersed to be crippled, said Blake. The rest of the “Emerald Triangle” growing region of Mendocino, Humboldt and Trinity counties will make up for what’s lost. “Redwood Valley is the sweet spot — it’s prime growing area. But it’s a small percentage of the Triangle. There is a bumper crop coming in that’s bigger than anyone can even dream of.”

David Downs is the San Francisco Chronicle cannabis editor. Email: ddowns@sfchronicle.com

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