The Marijuana Herald
California’s marijuana cultivation water-quality program has filled just 10 of its 31 authorized regulatory positions due to persistent funding shortages, prompting officials to propose a 28% fee increase as hundreds of growers face removal from the program for unpaid fees.
The findings are detailed in the State Water Resources Control Board’s October 6 executive director’s report, which also reveals that regulators have identified 147 licensed marijuana cultivation properties suspected of diverting water without the necessary legal authorization.
According to the report, ongoing nonpayment of regulatory fees has significantly reduced the state’s ability to oversee marijuana cultivation and help businesses comply with environmental requirements. Although the program is authorized to employ 31 positions funded through annual fees, only 10 are currently filled.
For fiscal year 2027-28, staff have proposed increasing enrollment fees under the state’s Cannabis Cultivation General Order by 28%. Officials say the increase would generate enough revenue to maintain the 10 existing positions, rather than restore staffing to previously authorized levels.
The funding problems come as participation in the regulatory program continues to decline. California currently has approximately 4,000 active marijuana cultivation water-quality enrollments, about 400 fewer than a year ago. Regulators anticipate terminating another 500 enrollments in December because of fees that have remained unpaid for multiple years.
Losing enrollment in the water-quality program can also jeopardize a cultivator’s license issued by the California Department of Cannabis Control. Despite repeated notices to businesses with overdue payments, state officials say hundreds of enrollments are terminated annually.
The report also details a separate investigation by the Division of Water Rights and the Department of Cannabis Control into unauthorized water use by licensed marijuana cultivators.
Investigators identified 147 properties that appeared to be diverting water for marijuana cultivation without the required water rights. The Department of Cannabis Control sent compliance notices to all 147 licensees in August 2025, requiring them to contact water regulators and verify their water sources.
Of those properties, 74 underwent investigations in May 2026 after responding to the notices. Approximately 40 required additional field follow-up, while 33 subsequently came into compliance after contact with regulators.
The remaining 73 licensees did not respond to the original notices. State officials say they are continuing to coordinate outreach and potential enforcement against those businesses, including one cultivator who acknowledged diverting water for marijuana production but refused to obtain the necessary water right.
Beyond the investigation involving licensed businesses, the report says enforcement personnel supported 146 search warrant inspections at illegal marijuana cultivation sites during 2026 and issued 15 formal administrative enforcement actions.
State officials say the combination of declining fee revenue, reduced staffing and ongoing environmental violations continues to make comprehensive oversight of California’s marijuana cultivation industry difficult.