When California passed a measure permitting the sale of marijuana for recreation, there was a presumption that within short order, there would be cannabis farms cropping up all over the state, shops in almost every city and that adult consumers could score a stash with a stroll down the street or a quick dash across town. However, as our Los Angeles marijuana business owners have observed, the reality hasn’t quite measured up. In fact, while this is indeed the largest market in the U.S., it hasn’t performed at the same clip the state and business owners would have hoped.
As recently reported by The Los Angeles Times, factors at play include retail operations bridled by a host of regulations, oppressive taxes and decisions made in most cities to prohibit the retail stores. Cannabis law firms have also noted some shops have been dragged to city hall over neighbor’s complaints their presence is a nuisance. Police in several districts have expressed concern about crimes related to both the industry and illicit trade, which hasn’t completely disappeared, given the markup prices on legal marijuana.
Los Angeles marijuana attorneys see a wide range of legal cannabis challenges for the incoming governor, Gavin Newsome, who takes office in January. These include initiatives like:
- Inability of California marijuana shops to access banking services.
- Crippling tax burdens on pot shop retailers.
- Illicit marijuana cultivation and sales, mostly stemming from high cannabis costs due to government taxation and regulation.
- Problematic issues with sales of marijuana to minors.
- Stifled growth of cannabis industry due to ongoing federal restriction on the drug.
One business owner likened the process of securing a license to operate a pot shop similar to “the Hunger Games,” a dystopian tale that involves fights to the death. State officials thought when Proposition 1 passed in 2016, there could be as many as 6,000 licensed cannabis shops in California by the end of 2018. Yet here we are, roughly 1,790 licensed shops in total, with the California Bureau of Cannabis Control issuing just 550 temporary and annual license a year. It is likely there are retail locations and delivery services flying under the radar.
Our Los Angeles marijuana lawyers know a fair number of clients who have expressed frustration at the lack of a crack down on these operations that siphon business by offering a cheaper product. Products sold on the street aren’t guaranteed safe, but they also don’t have to undergo the $500- to $1,000-a-batch testing that licensed shops do (another factor that drives up the price for legitimate shops). Unlicensed dealers can face some serious consequences, especially if they’re selling products to minors or anywhere practically within earshot of a school or daycare. Officials with the CBCC as well as local police say they have been working to address this, but more allocation of resources is necessary.
In total, state officials estimate they’ll receive roughly $471 million in revenue from cannabis shops in 2018, which isn’t chump change, but does fall short of the $630,000 the governor had promised in his budget prior to approval. State officials say that while they are willing and ready to process additional licenses, the reason they haven’t is because the system as established is predicated on the notion of dual licensing and local control.
What many local city councils don’t seem to understand is that they are not eliminating the sale of marijuana by barring cannabis shops from doing business there. They are already there. Our Los Angeles marijuana lawyers and others will continue to push back on and advocate for reversing these bans. The more places that can operate above board, the less people will turn to the black market.
We’re optimistic there will be positive headway made for legal marijuana businesses, and we’ll keep fighting right alongside you.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.
Additional Resources:
One year of legal pot sales and California doesn’t have the bustling industry it expected. Here’s why, Dec. 27, 2018, By Patrick McGreevy, The Los Angeles Times
More Blog Entries:
Why Small Marijuana Businesses Need a California Cannabis Attorney, Dec. 22, 2018, Los Angeles Marijuana Lawyer Blog