Marijuana Is Legal In California From January 2018
The law that will come into force was approved in 2016, and decriminalizes the cultivation, sale and consumption of cannabis. The world will watch with expectation the profitability of the so-called green gold business
A law passed in 2016, effective January 1, decriminalizes cultivation, sale and recreational consumption in this state, which in itself is a world economic power. For this reason, the world will be attentive to this great experiment of the profitable business of green gold.
The firm Arcview , which makes specialized studies of the cannabis market, estimates that the market will grow to 22,600 million dollars in 2021, from 6,700 million in 2016.
In California alone, it will be estimated at 5,800 million dollars in 2021, 74% of the total for recreational use. However, the transition that begins in 2018 will not be automatic nor simple. While eight states plus the capital Washington DC already legalized recreational use, nothing compares to the magnitude of California. Only the city of Los Angeles will concentrate the largest cannabis market in the world.
“The first or the first two years are going to be chaotic,” while many cities determine their own regulations and stabilize the supply and demand market, predicted Troy Dayton , head of Arcview. California had already been a pioneer in legalizing medical marijuana two decades ago.
Despite the phenomenon of the state, the substance is considered an illegal drug by federal authorities and the government of President Donald Trump has been hostile on this issue.
According to the new law, anyone over the age of 21 – as with alcohol – can have up to 28.3 grams of grass ; no prescription needed anymore. It can not be consumed in public places or while driving a car; neither less than 300 meters from a school or a place with children. The production, distribution and sale of marijuana first requires a municipal permit and then another from the state.
Cities such as San Francisco, San Diego and San Jose did not waste time and already handed out licenses to several dispensaries that, with their state permits, will be able to start the first day of the year with recreational sales.
In Los Angeles we will have to wait. Jerred Kiloh for example will not be able to join this party because the authorities will start receiving applications only on January 3.
Cat Packer, head of the Cannabis Regulation Department in Los Angeles, warned that the process “is not going to happen overnight.”
That December afternoon, the Kiloh dispensary is full. A man when leaving says “I love your store”. The waiting room has a cannabis aroma and inside there are products of all kinds, from flowers to creams, passing through foodstuffs.
The great concern of this entrepreneur, who has a decade in this business, is that while not open pending the process, hundreds of stores will be operating without a license, offering more attractive prices for their customers, who may end up abandoning it. Dispensaries are seen on every corner, but it is difficult to know which is legal.
“About 80% of the industry that operates in Los Angeles does it without permission, there are only 135 stores that pay taxes” and Kiloh is also an economist and president of the United Cannabis association, which represents half of them. According to Arcview, in 2016 the illegal market generated 5.1 billion dollars.
Authorities in Los Angeles have said they are working on a plan to combat illegal trade. The police for example have the power to cut light and water to irregular establishments. Some more conservative cities will simply prohibit the sale.
On the other hand, some projections estimate an increase of up to 70% in the cost of the products , first by the new state taxes, 15% of the revenues and 10% of the sales, which are added to the municipal tax (2-10). %).
It also influences that each element in the supply chain will need a license: production, distribution and sale, and technological elements such as a tracker for each plant.
“We will see a crazy price fluctuation in the first year and the second ,” Dayton said. For its part, marijuana for medical use will be cheaper and can be purchased in more quantities. Kiloh estimates that to cover the current demand “you have to have 10,000 licenses available right now” in California. An antecedent is in neighboring Nevada , where in July, when recreational marijuana was sold, emergency measures had to be approved to authorize distributors outside the limits of the law because there was no way to meet the demand.