LOS ANGELES – Adult use of cannabis has been legalized in the Golden State for over two months already but there are many known cannabis cultivators that are not yet licensed. The estimate is that less than one percent of the total cannabis cultivators in California have obtained a license to legally cultivate their cannabis. This statistic emerged from a 38-page report published recently by the California Growers Association.
The reported stated that there are as many as 68, 150 marijuana growers in the state of California. However, by the 7th February the number of licensed growers was sitting at a meager 534. The report admitted that that a low percentage of 0.78% of the total 68, 150 marijuana growers have received licenses for the legal cultivation of marijuana. The report suggested that the reasons for the delay or lack of licenses are due to a lack of resources on the part of the farmers or entreprenuers. The cost of the licensing may be too high for many of the cultivators as well as the regulations imposed on the potential licenses could be too stringent, preventing many from obtain the legal documentation needed to legally grow cannabis.
Even before this report was released, many cannabis cultivators brought forward concerns regarding this very matter. They suggested that profits are being let go because of other growers and producers in cities outside of Los Angeles. One individual commented that he estimates his loss is sitting at almost $10, 000 per day. He attributed the direction of these potential customers and the profits to be flowing in for producers in the Santa Ana and West Hollywood area.
In 2017, a research paper published by the University of California Issues Center calculated that the revenue in 2018 from the sale of recreational cannabis would be at approximately $5 billion. The University’s study suggested that this extra income could be funelled towards projects that will assist in other areas of community issues. This projected amount is not, however, the current reality. This shortfall is mainly due to the lack of licensing and permits for businesses, cannabis farmers, cannabis dispensaries, pot delivery services, and many other marijuana industry related services.
The medical marijuana market is expected to take a blow from the opening of the sale of recreational marijuana. The medical marijuana market is estimated to fall to just under $1.5 billion from its current sitting of $2 billion from 2017 to 2018. This amount is huge considering that the illegal market comprises 30% of the total cannabis sales.
The lack of cannabis cultivators obtaining their licenses to legally provide their services, whether it is cannabis dispensaries, pot deliveries or just cultivation. There was a large tax revenue predicted for the city of Los Angeles (and in essence the whole state of California) after the legalization of recreational marijuana and the sale thereof however this tax revenue predication seems to be far in the distance. The regulations and costs involved for individual cannabis cultivators to obtain these licenses are prohibiting the market to take off as expected. Independent marijuana agriculturists are obviously now met with a challenge; how can they get their product to the stores if they are not and cannot become licensed under the new regulations? This poses a serious question especially when one takes into account how ready the black market is to welcome struggling farmers.
The CGA ended the extensive 38-page report by stating that the issue of low licensing numbers is crucial to be addressed if the state wishes to see the tax rewards that is a possible. The estimated industry and financial “boom” that was such an exciting feature in the beginning of the year is now just a novel thought of what could be. The independent farmers need to be addressed as to what their main concerns are with becoming licensed and the licensing regulations and the system needs to be revisited with all the factors in mind.
The California Growers Association has been active in making a change, or at least in attempting to get the issue some attention. The CGA has brought the issue forward with California’s Department of Food and Agriculture however a response for them have yet to be received. The Department of Food and Agriculture is charged with the regulation of the licensed cannabis cultivators in the state of California.
The California’s Growers Association is a heavyweight in the Golden State’s cannabis industry. The Association is advocating for the forward movement of the new laws and for the market to really get off the ground. The CGA is moving for more cannabis cultivators to become legally licensed and is relying on the assistance of government and officials in parlimentary power to bring them to this positive result.
An administrative plan is currently being drafted to assist the marijuana trade. Specifically, the plan is aiming at ensuring the environmental and public saftely impacts are reduced to a minimum while bringing the majority of the illegal traders and growers into the legal market.