. >> reporter: five a year in this greenhouse, says grupo flor's gavin kogan, versus just one or two this is one of the firm's seven california sites.t' >> right now whappening in inlifornia is aggregation. companies are acquother companies if wdon't cultivate, lose our supply chain and we can get crushed out. >> reporter: crushed out like oliver bates. so you've been cultivating marijuana for 25 years, now out ss business and broke? >> now out of busind broke. te reporter: bates grew cannabis for years in the my county hills near big sur. but wi legalization came rules and regs. >> outside investment came in and lobbied their interest and made sure that in the new regulati that only commercial greenhouses were allowed to grow cannabis. >> reporter: so you cannot have an outdoor farm in monterey county? y yes. i've been giving aed. all my weed. i can say a pound of mine thde it tgrammys and it was a big hit. >> reporter: but it's not legal yet. >> not legal yet. >> reporter: what are you dog for a living now? >> reporter: i'm actually notin making a lright now. >> reporter: how are y

>>ter: grupo flor's gavin kogan sympathizes. >> this is really difficult to do. it takes a lot of capital. regulations are heavy. we're overtaxe and so where i really feel the toin coming for small farmers is that they're havinace the obstacles we face without the capital and without the people and the business know-how to really do an effective job. >> reporter: and without the cost advantages of the black market frowhich they've come. nikki lastreto's mendocino farm is now legit. but most of her neighboring farmers aren't. atd they pose as much of a threat as her corp competitors, she says. >> right now they're able to sell at 1500 where we're getting after all the expenses involved, the taxes cetera and the packaging about 900 a pound. >> reporter: and if you're a seller on the black market you don't pay taxes >> you sell it on e black, you just do like the old days. you just grow it in seclusion, hope the cops don't find you, med find a buyer and they right up. they pay cash. it's out the door.r: >> reporo permits. >> no permits no licenses no taxes. the only