The Reshaping of the California Weed Market

The California weed market is arguably one of the most successful in the world given the length it has been around as well as the sheer size of the industry. When the state decided to implement the use of recreational cannabis throughout the nation back on January 1st, everything in the industry had to change.

Although the Californian cannabis market has been slated to be the largest and fastest growing, things seem to be getting off to a slow start as of now. One of the reasons that this is occurring seems to be the consumers choice to continue utilizing the black market as their resource to buy cannabis and cannabis-related products. The state has decided to fight back on this accord by putting new legislation in place that could effectively help to stimulate the market even further. Lori Ajax, the state’s top marijuana regulator, stated that “unfortunately there is confusion out there.” California has only been selling recreational cannabis for about a few months now, with temporary laws in place to aid sales. Throughout the state, operations are being undergone to produce large and higher amounts of cannabis and various products that use cannabis as their base.

The state recently held a hearing led by Ajax, where those who are involved in the cannabis market got a chance to speak their minds as to what needs to change in order for the industry to finally flourish. One of the main issues with the industry has been the high rate of taxes that have been undergone over the past few months. In some instances, taxes have meant that individuals are paying as much as 50% more for a product that they could buy much cheaper on the black market. These taxes may have started out as a way to entice the legal measures to be put in place, but at this point, it seems to be hurting the market more than anything. Sarah Armstrong of Americans for Safe Access, stated that “the patients are citizens too. They have rights and they have needs.” These need to not seem to be met by the state, and therefore a large amount of complaints are being made about what should be a very smooth running industry.

One of the aspects that has caused costs for producers to rise has been the issue of packaging. New state laws have rightfully gone into place that make it so packaging needs to be very explicitly childproof. Although this is of course a necessity, it seems as though this may be hurting the profits in the short run and in turn passing on these costs to the consumer. In order for the California cannabis market to continue to flourish, several aspects need to be ironed out. The first is the high tax rates that were mentioned prior. If patients are able to find cannabis that is competitively priced with the black market on cannabis, they may be more willing to switch over. The only issue in the market seems to be with that of price and how much the legality of cannabis is adding to the final price and cost of the goods.

The cannabis market, however, is still very much in its infant stage due to how new it is overall. The hopes are high that over the course of the next few years, companies will be able to iron out these issues with the government so that they can continue to offer high quality and low cost cannabis to patients and consumers alike in the space.