They write…….Thousands of marijuana businesses who started the year hoping to join the state’s new regulated market have discovered they have no pathway to get licensed due to local bans, zoning rules, pricey fees and more.
The owner of a family-run cannabis farm, tucked away in a rural Riverside County community known for marijuana cultivation, says he’s paid taxes and lab tested his crops for years.
At the start of this year, he thought he was well situated to join California’s newly legal recreational marijuana industry.
But the market, quite literally, refused to come to him.
Proposition 64, California’s cannabis law, allows each community to decide where commercial marijuana is allowed — or if it’s allowed at all. The farmer’s community said the closest area where he can legally grow his crop is miles away. He can’t get a state business license unless he uproots his family and sells his land at a loss.
So the farmer plans on quietly staying put, with his 24 plants, for as long as he can before authorities force him out of business.
He’s hardly the only marijuana entrepreneur in California who’d prefer not to be a criminal.
Consider the double life of the guy who runs a marijuana delivery service.
As he’s tried, and failed, to get a state license this year, he said he’s laid off several employees and, officially, shuttered his business.
But behind closed doors the industry veteran is staying afloat by brokering the sale of prized California cannabis to buyers in states where weed isn’t yet legal. Wholesale cannabis fetches twice its domestic price out of state, with none of the taxes.
“A lot of people would like to be full-on legitimate,” the delivery operator said. But “you have to pay rent, you have to be able to eat, so you’ve got to do what you’ve got to do.”
Multiply those stories by a few thousand, and you’ve got a glimpse of the size and scope of the illicit side of California’s marijuana industry.
Their stories — as well as market research, police activity and other measures — suggest that even as a legal market for recreational marijuana is starting to take root in California, the illicit side of the weed business is only growing stronger.
California established a gray market for cannabis 22 years ago when it legalized medical marijuana. Though the drug technically was legal only for medical patients, in reality it also was easy to find and relatively cheap for recreational users, too. So when Prop. 64 was approved by voters — promising to legalize, tax and regulate cannabis for all adults — no one expected the gray market to dissolve overnight.
And data indicates it hasn’t.
Two years ago, industry trade groups estimated that California was home to 50,000 growers and some 12,500 dispensaries. But in the year that Prop. 64 has been in effect, the state has issued licenses to only a fraction of those businesses; about 5,500 growers and 600 retailers.
Experts say that’s why California’s cannabis tax revenue is, so far, falling well below budgeted projections.
“We’ve still got tons of illegal grows,” said Sgt. Tyson Voss, who heads up the Riverside County Sheriff’s Marijuana Eradication Team. “And dispensary storefronts, a bunch of those just opened up.”