January 1, 2018 marks a huge milestone for the Cannabis Industry in the the state of California. With the whole world watching, many local residents were eager to finally stand in line at a dispensary without the fear of getting arrested or shamed. For many, this was another victory for the Schedule 1 substance that had no place to go but up. For many others, it was an operational nightmare. Here, we will highlight some of the problems the industry is encountering so that you, the consumer, are aware of what's going on.
To start things off Prop.64 led to the creation of the Bureau of Cannabis Control (BCC). The BCC is in charge in regulating Cannabis according to the guidelines of the Medical Cannabis Regulation and Safety Act. Essentially it is the government branch that business owners must interact with in order to be properly sanctioned by the State to sell Cannabis. Part of the rules that the BCC has established is that licensed companies may NOT work with unlicensed companies. With that information, many would believe that the the number 1 priority for all cannabis business would be to obtain a license. In actuality, as of January 19, California had only issued 88 retail licenses for the whole state; 12 of them issued here in Southern California. Most California cities have outright banned any type of commercial Cannabis activity in their city. This has led to a very limited amount of licenses issued- outside the control of the BCC. Many of these cities are waiting to see how commercial businesses do in cities that have approved it like Santa Ana. What does that mean? thousands of cannabis collectives will not have many products from licensed manufacturers available for sale until many of the non-licensed cities decide to allow it.
The other conundrum that the California Cannabis market is going through is the exorbitant amount of taxes that consumers are paying. In many cases, they are seeing their total order costs rise from 30-50% of what they were normally used to paying. This in turn, is creating brewing a demand for the black market. Though hearings will start in February regarding tax collection, we will not see any updated regulations on the matter until May.
California's path to fully implementing Cannabis may actually still be pretty far off. Only time will tell if it works out or if it will go back to where it came.