Article by Chris Roberts, Leafly
The backers of Prop. 64, the 2016 Adult Use of Marijuana Act, sold California voters on the promise that small and medium businesses would be the engine powering the state’s $7 billion legal cannabis market.
So far, that’s not happening. According to a report released today by the California Growers Association, a small-farmers advocacy group, fewer than 1% of California’s estimated 68,150 cannabis growers have secured state licenses to continue their businesses legally.
The CalGrowers report estimates that 80% to 90% of growers who did business with the state’s legal storefront dispensaries prior to January 1—when new licensing requirements went into effect—“are being pushed to the black market.”
The report confirms what many have already observed. Rather than regulate local cannabis companies, prohibition-minded lawmakers in marijuana-producing regions have banned them altogether. Other popular brands, including some owned by women, have gone into “hiatus” for want for a prohibitively expensive permit, or zoning requirements, or some combination thereof.
“[F]rom Oakland to Humboldt, from Los Angeles to Gold Country, from cultivation to delivery service, many of the hardworking pioneers of our cannabis marketplace are being left behind, primarily because they are unable to afford one time costs of regulation,” said Hezekiah Allen, executive director of the California Growers Association.
Allen’s group is calling for state lawmakers to review the state’s regulations and relax certain requirements. The growers group would like to see the state lower the entry barrier to allow for more existing cannabis producers to join the legitimate market.
If they do not, “legalization will look a lot like prohibition,” Allen said, but worse: Economic “depression is the best case outcome,” according to the report. “Economic collapse is the worst case.”
As of Feb. 18, fewer than 2,700 licenses for commercial cannabis activity had been issued throughout the state, according to a review of records. A total of 1,220 licenses had been issued to marijuana storefront retailers, delivery services, and distributors, according to the Bureau of Cannabis Control.