California’s legal marijuana regulations are a mess. That’s the opinion of everybody involved, not just my idea.
When the rules went into effect January 2018, temporary licenses were issued because the rules were still in work. This was risky for license-holders, but this type of thing has happened elsewhere and the impact was minimal. Trouble is, there was a deadline date for the temporary status, and when it expired in June, the response was to issue “provisional” licenses while more rules were written. The deadline for provisionals came and so they went back to temporaries. Those currently holding licenses are now facing the deadline for those, and it’s illegal to do this again without the legislature passing a new law allowing the extension.
SB67 is currently stuck in Appropriations as the end of the session approaches.
Each time one of these phony arrangements happened, the bureaucrats had to re-issue licenses, really gumming up the works for new licenses as old licenses had to be redone.
Meanwhile, at the local level, some jurisdictions were inventing their own rules and getting geared up to issue their own permits. That process was made a tad bit easier by an exemption granted to locales to bypass CEQA rules (CA Environmental Quality Agency) and procedures. That saved a ton of money and time for licensees. But, that exemption expires shortly, which means licensees might have to file Environmental Impact Statements.
I’ve been in Mendocino and Humboldt counties lately, the most productive cannabis producing regions in the world. In Humboldt there are an estimated 6000 growers, about 100 have been licensed. It’s similar in Mendo. Meanwhile there are 600 retail stores licensed in CA, slightly more than Washington, much less than Colorado or Oregon. Two-thirds of the state has enacted bans or moratoriums on the businesses, meaning it’s rare to find a [legal] retail outlet anywhere but in the large cities.
Five years ago the wholesale price for CA-grown weed was about $2500 a pound, much more when it was exported to other states. Once sold, the money returned to places like Ukiah and Eureka and went into vehicles, farm and ranch supplies, and other consumer items which generated sales tax revenue. In Eureka right now, those sales tax revenues are down 25% and the city leaders are looking at budget cuts. It’s partly that the [illegal] export market is down as other states legalize, but the wholesale price is currently $500 a pound, and dropping fast.
Regulation compliance costs are growing fast, the licensing process is bogged down in useless red tape, anticipated tax revenue is way below expectations, and the market itself is crashing as other states grow more than they need. Retail prices, if you can find a store, are ridiculously high.
I’ve asserted this before: If you want to engage in the legal marijuana thing in California you’ll need an unlimited supply of money and an army of lawyers. And hope like hell that some East-coast sucker wants to buy you out.