Report: Laws Are Pushing CA Pot Farmers to Black Market, Not Oversupply

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Report: Laws Are Pushing CA Pot Farmers to Black Market, Not OversupplyBy Chris Roberts.  Ninety-nine percent of California cannabis growers are not licensed, according to a new report, but this isn’t because the state has an oversupply of legal cannabis. Countywide bans, strict regulations and expensive permit fees are keeping California cannabis providers — those who want to go legal and who used to sell to dispensaries before Jan. 1 — in the black market.

When California voted to legalize cannabis in 2016, advocates promised that the new regulations would capture illicit cannabis production and turn it into a regulated market, creating new taxes that would provide benefits for everyone.

Even cash-strapped rural areas without an economic engine would have money for schools and roads — hence the proliferation of ≥desert communities in Southern California banking on massive, million-square-foot cultivation complexes.

What legalization did not promise — not in the campaign materials for Prop. 64, the Adult Use of Marijuana Act, approved by 57 percent of voters on Election Night 2016, nor in the regulatory debates afterwards — was an economic crisis for marijuana farmers. But, just shy of two months into California’s commercial cannabis era, that’s what’s unfolding in the state’s rural marijuana-producing regions.

There are tens of thousands of cannabis farms in California, maybe as many as 80,000, according to a state estimate in 2016. And as of Feb. 18, fewer than 1,500 — or one percent — had secured cultivation licenses from the state, according to a review conducted by the California Growers Association, the main lobby for California cannabis growers in the state capitol.

That’s far fewer than the 20 percent or so that some guessed at, and far too few to justify the argument that these growers are merely operating out of a “desire to stay illegal.”

It’s accepted that California’s oversupply of cannabis is driven by demand from out-of-state markets in prohibition states.

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