LOS ANGELES, Cal. — Almost two months after the recreational use of marijuana has been legalized in California, only less than a percent of pot producers in the state have been licensed. This percentage was disclosed in a recent report published by a marijuana industry group.
It’s All in the Numbers
There is a staggering number of 68,150 pot producers in California, but only 534 of them are licensed as of February 7. The California Growers Association (CGA) stated in its 38-page report that only 0.78% of marijuana growers have been licensed. The CGA has attributed the slow pace of licensing to regulatory and cost issues.
Pot producers have earlier voiced their concerns regarding the issue, saying they are losing their profits to competitors in other cities. A marijuana producer in San Fernando Valley revealed that he is losing his customers to those in West Hollywood and Santa Ana. He estimated his loss to reach $10,000 per day.
In a study released by the University of California Agricultural Issues Center in 2017, it projected the new market for recreational marijuana to generate $5 billion in revenue in 2018. The amount will help in funding projects that will address other issues. However, the slow distribution of permits to marijuana producers could hinder improvements.
As a result of the ascent of recreational pot producers, the medicinal marijuana market is expected to decline from about $2 billion in 2017 to only about $1.4 billion in 2018. That is an astonishing amount, especially since at least 30% of marijuana sales come from the black market.
Threat from the Black Market
The slow pace of licensing of independent marijuana providers could hinder the anticipated increase in taxable revenue in the state. The independent pot farmers struggle to get their products out. But the black market will continue to prosper as an alternative channel for users and sellers alike.
The California Growers Association concluded its report with a statement highlighting the urgency of licensing for more of the market to become taxable. However, the expected outcome from the boom of the recreational marijuana market will definitely not materialize. It will happen if independent pot producers will not comply with the regulation.
Compliance with the Regulation
The association is taking this matter into its own hands, raising the issue to the state’s Department of Food and Agriculture, although the agency has yet to respond. The Department of Food and Agriculture is in charge of regulating the number of producers of pot in the state.
The California Growers Association sees itself as California’s biggest federation in the marijuana business. It is doing everything it can in moving the wheels forward to license more pot producers. The association is hoping to achieve this goal with the help of government officials.
Hezekiah Allen, executive director of the CGA, said they are developing an administrative plan. The plan will effectively restrict the public and environmental safety impacts of marijuana. Thus, pot producers that are currently distributing underground had to comply with the state’s market.