As multiple wildfires rage across Southern California, cannabis dispensaries in the greater Los Angeles area are attempting to maintain operations while preparing for potential evacuations amid deteriorating conditions, sources told Green Market Report early Wednesday.

Four major fires – the Palisades, Eaton, Hurst and Woodley fires – have burned more than 5,000 acres combined as of Wednesday afternoon, forcing thousands to evacuate and leaving many businesses, including the region’s cannabis retailers, to make difficult decisions in an already economically battered market.

The Los Angeles Fire Department issued mandatory evacuation orders for large swaths of Pacific Palisades, with the evacuation zone stretching from the Pacific Coast Highway to Topanga Canyon Boulevard. Similar orders are in effect for parts of Pasadena near the Eaton Fire, ABC7 reported.

“Right now there’s a lot of places in the surrounding areas that are not open,” said Gilbert Romero, who works security at Harvest dispensary in Santa Monica. He said falling ash and smoke are visible but operations continue at the location. “We’re getting a lot of new people from other places because their places are closed.”

The fires, driven by Santa Ana winds reaching up to 60 mph with gusts of 100 mph in some areas, have forced several dispensaries to close, including the prominent 99 High Tide dispensary in Malibu, sources confirmed. Others reported they’re operating without clear guidance or emergency protocols from management. Green Market Report attempted to reach a number of operations bordering to the impact zones, such as Cookies in Brentwood and a Green Thumb Industries store off Wilshire Boulevard.

“Unfortunately, no one communicates these things with us, so I genuinely have no idea,” Lexi Hatch, a 24 year-old budtender at Farmacy Westwood near UCLA’s campus, told GMR around 11 a.m. PST on Wednesday when asked about contingency plans. Hatch, who moved to Los Angeles from Boston four months ago, said that she was keeping watch on news updates while continuing regular operations.

Some dispensaries, though, do have clearer protocols. At Erba Collective off Pico Boulevard, a front desk worker who identified herself only as Alex said they were “perfectly fine right now” but noted they were located just “10, 15 minutes away from Santa Monica.”

The situation remains particularly tense in Santa Monica, where Harvest’s Romero reported seeing black smoke, which is indicative of active burning.

“If we choose to stay open and it’s left to us, we’re gonna do it. Unless we see a fire,” he said, adding that ultimate closure decisions would likely come from city authorities.

At Xzibit West Coast Cannabis in Bel Air, Jordana Shank, a 27-year-old budtender, said management informed staff they would maintain regular 9 a.m. to 10 p.m. hours unless directed otherwise by authorities.

“Whenever the fire department shows up and says we need to evacuate is when we would close our doors,” Shank noted.

The fires have created a patchwork of closures across the normally bustling cannabis retail landscape. Cookies dispensary locations “up that way going towards L.A.” have reportedly closed, according to Romero, while some beach-adjacent locations remain open.

Banding together

Industry leaders are monitoring the situation closely while coordinating support efforts through informal networks, such as a text thread of approximately 50 dispensary owners who share updates and offer mutual aid. Jerred Kiloh, president of the United Cannabis Business Association and a 25-year veteran of cannabis retail, reported that several dispensaries in evacuation zones have already shut down, with many delivery services suspending operations to keep drivers off the roads.

Carlos De la Torre of Cornerstone Research reported being just two miles from an evacuation zone, Kiloh noted, adding that smoke conditions were also significantly affecting customer traffic, as residents heed official recommendations to stay indoors.

“When resources are spread thin, you kind of have to rely on each other,” Kiloh said, noting that the industry has developed informal mutual aid networks following previous crises. He expressed particular concern about insurance coverage, explaining that many operators have had to reduce coverage due to high premium costs.

“Fire insurance is not usually on a lot of commercial insurance plans. And when you pay this much insurance just as cannabis, you got to pick and choose what is high risk and what is not,” he said.

In prepared remarks emailed to GMR, the California Cannabis Industry Association expressed concern about both immediate and long-term impacts on businesses and their employees, “particularly those already navigating economic and regulatory hurdles.”

The organization said that the Department of Cannabis Control is making disaster relief available to affecetd licensees, who can evacuate cannabis products without prior authorization if facing immediate fire threat.

Aside from retail, there are growing concerns about potential impacts on indoor cultivation facilities in the region. While Los Angeles County prohibits outdoor growing, indoor facilities could face challenges from smoke infiltration.

“If you’re pulling smoke into your grow room, there’s really no way to get rid of it,” Kiloh explained, referencing past incidents where smoke contamination affected crop quality during Northern California wildfires.

Southern California marijuana businesses facing direct and residual effects of the latest round of wildfires will yet again have to deal with the challenges that come with limited insurance coverage, smoke damage and evacuations that will likely compound the sector’s existing financial pressures.

According to local outlets, the Pacific Palisades fire, along with the Eaton, Hurst and Woodley fires, has burned more than 15,000 acres, driven by hurricane-force winds, and triggered widespread evacuations, with mandatory orders stretching from the Pacific Coast Highway to Topanga Canyon Boulevard toward Interstate 405.

Many delivery services have suspended operations to keep drivers off the roads, while some retailers continued to operate without clear emergency protocols.

Cannabis companies could face “exponential losses” that other businesses don’t during disasters, United Cannabis Business Association President Jerred Kiloh told Green Market Report on Wednesday, in large part because of restricted insurance options and prohibitively expensive premiums.

“Fire insurance is not usually on a lot of commercial insurance plans,” Kiloh said. “And when you pay this much insurance just as cannabis, you got to pick and choose what is high risk and what is not.”

He added, “I think when people are cutting costs, they’re cutting these kind of costs first… I think a lot of people are reducing their insurance coverage just to afford to stay in business.”

Most cultivation operations appear safe from direct fire damage for now. The facilities cluster in industrial areas with cheaper real estate, such as Sun Valley, Van Nuys and warehouses along the Ronald Reagan Freeway, rather than in the wooded residential zones currently threatened, according to Kiloh. But growers are taking precautions.

“A couple of OGs I know are all on emergency generators. Running bare minimum lighting. Putting air purifiers in their rooms,” Oliver Summers, president of retail operations at United Patient Alliance in Sun Valley, said in a text message. The situation has industry veterans “reminiscing about the Long Beach power outages from about 10 years ago.”

Even indoor growing sites miles from the flames remain vulnerable to smoke infiltration through ventilation systems designed more for odor control than smoke defense.

“Even though crops do a lot to filter air coming in and going out, there’s just no way to filter that kind of air coming in when mostly you’re trying to scrub and clean air from smell when it’s going out,” Kiloh explained. “You’re sucking fresh air in from the outside. And if you’re not treating that air, you could be sucking smoke into your rooms.”

The risk brings back memories of Northern California’s 2017 wildfires.

“I don’t think anyone wants to go through what we went through in 2017 and some of the other Northern California fires where we had Campfire OG be a strain because it just smelled like smoke,” Kiloh said.

Another complication for cannabis operators is the need to move product and large amounts of cash while maintaining security.

“There’s a lot of security risk in trying to just move things out or leaving your dispensary unsupervised or unprotected because looters will take any advantage they can,” Kiloh said. “We know that cash isn’t insured and a lot of our products may not get full value.”

The California Cannabis Industry Association said in a email statement to GMR that the state’s Department of Cannabis Control is offering disaster relief to affected licensees, including permission for emergency product evacuation without prior authorization. The organization said it was “deeply concerned” about both immediate and long-term impacts on businesses and employees, and said it would advocate for policies and relief measures to support them.

Energroup Holdings Corp. (OTC: ENHD) will enter California’s regulated cannabis industry through its planned acquisition of portfolio company Cocannco.

Cocannco is simultaneously working to acquire Clearly California Products, a cannabis manufacturer that launched in 2022, the companies announced Friday. The deals would give Energroup an immediate foothold in California through Clearly California’s existing manufacturing agreements and planned dispensary expansion.

Separately, Cocannco has agreed to purchase a licensed 22,000-square-foot indoor cultivation facility in Sacramento. The facility includes permits for manufacturing and distribution operations.

The company is also partnering with social media influencer GloZell Green to launch CBD products nationwide. Green, who touts more than 700 million YouTube views, will put her name on products including a CBD-infused relief balm and mushroom gummies planned for release this month.

“This fully turnkey operation comes with cannabis licenses for cultivation, manufacturing and distribution,” Cocannco officials said in a statement.

Energroup plans to conduct comprehensive audits of all entities as part of a Regulation A+ offering. The company aims to achieve full SEC reporting status and qualify for OTCQB market trading.

Clearly California developed its presence in California’s cannabis market through contract manufacturing, finding particular success with a topical balm for skin care and pain relief. The company plans to expand its THC product line to select California dispensaries in 2025 while launching CBD products that can be sold nationwide.

The companies did not disclose the financial terms of either acquisition.