SAN FRANCISCO – More than four weeks after California enabled cannabis growers to cultivate weed, only a few entrepreneurs have joined the latest system.
This happening threatens the shift of California into a structured market and a potential tax dividend worth $1 billion.
Not more than one percent of the 68,120 cannabis farmers in the state have obtained a license, according to the California Growers Association report.
The statement says that there are two reasons why they remain in the shadow, despite the legalization of growing marijuana.
Either the cultivators are banned from growing cannabis due to local rules, or they cannot meet the provincial government’s required fees.
The report also states that legalization will still look like prohibition without the participation of many cannabis growers.
The statement also indicates that the existing approach will not reach its goals unless they make some changes to it. These changes will allow independent and small businesses to follow the rules.
Taking the underground market to a structured environment means more harvests, more patrons, and of course, more money.
The University of California Agricultural Center conducted a study last year on this matter. Research has shown that the municipality’s recreational cannabis sales can reach up to $5 billion yearly.
However, they cannot put their arms on conservation violations on public property if the authorities do not have legal business tax revenues.
The report also says that small farmers grow marijuana on 2,500 square feet land or 1/20 acres. These small-time merchants face the most difficult obstacles in following the regulations.
Monterey County, for instance, issues permit to big-time greenhouse growers. However, the local authority rejects small and independent farmers in getting parcels.
The latest report also states that only 0.78 percent or 534 cannabis growers in California have acquired a license.
Kaiya Bercow of Santa Cruz County’s Utopia Cannabis said it was all about access to capital. He pointed out that pot operators and small businesses are less likely to receive financial assistance from banks.
That is because these businesses offer potential risks. Investors are afraid to take both financial and legal risks.
Bercow also noted that Utopia Farms had invested a hefty amount of cash over a year to follow both state and local license requirements.
He said everyone should expect this process when getting a business license in California. Cannabis, however, has not developed in that way.
Most marijuana farmers in California built their businesses without the need to obtain a license. They never assembled a team, and they do not have enough internal skills.
Hence, they must hire new workers, learn the unique skill set, or seek advice from consultants, which is costly.
Only 13 out of 58 counties in California have passed decrees, enabling commercial marijuana activities. Six more districts are expected to adopt such rules in the future.
About 14 regions are reviewing the issue so that they can make a final decision this year.
Nevertheless, 25 counties in California ban cannabis growers to plant marijuana in their regions.