It is two months down the line since California legalized the use of recreational pot, yet only 0.78 percent of the state’s growers have obtained a license to operate legally.
Prohibitive costs and difficult regulatory conditions have been blamed for the fact that less than one percent of California’s marijuana cultivators have joined the legal supply chain.
These facts have emerged in a report published by the California Growers Association (CGA).
It is estimated that there are currently 68,150 cannabis growers in the state, of which only 534 have been licensed to operate in terms of the new laws governing the legalized California pot industry.
Black market pot sales
Predictions are that in the region of 30 percent of the state’s marijuana sales will continue to be generated on the black market, according to a study conducted last year by the California University’s Agricultural Issues Center.
This opinion is also endorsed by the Growers Association which warns that if the state fails to issue licenses to the smaller and independent growers, not only will the black market continue to flourish, but the income from tax revenues would fail to meet current expectations.
The CGA says current regulatory conditions to qualify for a license have created structural and fundamental barriers that have to be changed to enable independent and small growers the opportunity to join the legal marijuana industry.
Hezekiah Allen, the CGA’s executive director, says non-compliance with the new regulations will encourage a black market system to continue, and that situation, in turn, will place an unnecessary burden on California’s law enforcement officers.
Allen says it’s imperative to develop measures for a regulatory framework to effectively curtail both the public safety and the environmental impacts of marijuana.
Furthermore, introducing less prohibitive compliance measures will encourage small and independent growers into the legal market and impact on the number of businesses operating on the black market.
Facts and figures
The legal cannabis market is expected to boost state coffers with $5 billion in tax revenue.
The medicinal marijuana market, which has been operating legally in California since 1996, is expected to decline from $2 billion in 2017 to $1.4 billion in the 2018 tax year.
Experts predict that 30 percent of the state’s pot industry will continue to operate on the black market unless compliance regulations are changed.
The CGA has committed itself to working more closely with state officials to encourage small-time business growers to apply for licences.