5 Problems Facing California’s New Cannabis Economy

Marijuana outdoors silhouette. Plants of cannabis in sunlight

As the New Year brought with it new dreams and hopes, it also brought a number of problems, especially concerning the infant Cannabis economy of California. After the crowds drew near to purchase their gram of taxed and regulated weed, they were left asking a couple questions that need answers fast.

Is legal Marijuana just too expensive?

Novelty often has the ability to have one throw caution to the wind. Yet, when it comes to your wallet, it often doesn’t take long to realize or question the sanity or sustainability of choice. After the hype of buying legal Marijuana died off, many customers were left asking the question of whether it was actually worth it.

Oakland Harborside’s first customer forked out $20 and some change for his first gram of legal marijuana. Berkeley Patients Group sold their top-shelf eights for a staggering $75 a pop. This was of course after state and local taxes were added. Regardless of whether these prices were for the high-end stuff, it still stokes a bit of fear.

What it all comes down to is a black market that will very much be around for quite some time after legalization. The worst case scenario is that it will stay the way it is unless the legal prices become more competitive. After all the legalizing taxes, customers will pay up to 40% more than illegal un-taxed weed. This is not an increase that too many customers will be willing to cough up.

Where can I find a store?

If you think that obtaining a liquor license is a tough task, just imagine the amount of red tape that a retailer needs to go through to be able to sell a bit of weed. Finding legal marijuana is not as easy as walking into a convenience store, far from it.

To put into perspective, LA is a massive city and finding medicinal marijuana is already a needle in a haystack search, especially if you don’t know someone who’s connected. If you want to expand the search state-wide the numbers become even more depressing.

Although marijuana is legalized in the state of California, individual cities and counties still have a say in whether they want legal marijuana sales or not. So far, the vast majority of cities don’t allow legal weed sales. The problem isn’t necessarily the cities not wanting to sell weed, but the long time it takes to process the paperwork surrounding the legalization.

Of the existing 1400 businesses that applied for licensing, only about 390 of them will likely qualify for a state license. It very much looks like it’s going to be a long while before legal marijuana will truly be freely available.

Legal or not, you can’t smoke in anywhere

Long before legalization was even on the cards, smoking laws had been tightened to such a degree that there are only a few places left where you are allowed to light up. Long gone are the days where you could jack up a smoke on the sidewalk or restaurant. Today, whether it be weed or cigarettes, you’ll have the authorities all over you if you light up in the wrong place.

Mikki Norris and Chris Conrad found out just how restricting and limiting the venues were for smoking after they have purchased their prerolls from Berkeley Patients Group. After 90 minutes, they still hadn’t puffed a single breath. They just had nowhere to enjoy their historic purchase.

Just like it is difficult to actually find a place that sells weed, it is equally challenging to find a place to actually smoke it. Cities are allowed to license smoking lounges, but many are yet to issue these licenses. In the meantime, customers should take heed of where they are allowed to smoke it up, or they will find themselves on the wrong side of the law…again.

Although it’s legal, prohibition-era issues still loom

Yup, the stigma around smoking weed is still there. More than that, legal retailers are still treated a bit like outlaws in the business world. Much of what was wrong with marijuana before legalization is still wrong. Post-legalization, the parallels can still be drawn between the illegal and the legal days.

Recreational retailers can’t use banks like other stores, they are forced to deal in cash-only transactions and debit cards. Moreover, cannabis retailers cannot claim expenses on their taxes. Although it is legal now, employers may still fire weed users, or deny a person a job based on their use of weed. The drug-free workplace laws still kick in.

Regardless of weed’s legal status, various customers didn’t want their picture taken while in line to buy some weed. This begs the question of how deep the stigma around cannabis use rooted. Whatever the case may be, it is clear that it’s still going to take a bit of time to adjust to the new era, even in a generally progressive and accepting state like California.

There are more questions than answers

Any new economy is shaky at best, and a cannabis economy especially so. It doesn’t matter if it was born out of the noblest of places. It will remain unstable throughout its infancy due to the number of unknown factors. Add an age-old illegal stigma to the equation and the waters become even murkier.

If you were to ask anyone about what they know about the Californian cannabis marketplace, they would probably not be able to tell you a whole lot. That is because no one really knows anything. In a state that produces over 13.5 million pounds of weed a year, one would think that for millions of residents, lighting up a joint will become a daily habit. At least, that is what investors are hoping for.

The fact remains that no one is really sure how everything is going to pan out. There are too many questions and not many answers.

Conclusion

Despite the cannabis industry’s promise of prosperity, there is still plenty of water that has to pass under the bridge. Although there are solutions to some of these problems. It might just take a long time to iron out all the niggles before the industry really picks up.  

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