California was the first state to legalize cannabis for medical use, and was considered for many years to be the undeniable leader of America’s cannabis scene. I have personally always felt that California never lost its title, but four states legalized cannabis for adult use before California did, so there is definitely an argument to be made that California fell behind. Colorado was the first state to legalize cannabis for adult use (beating Washington by a couple hours), and the first to start recreational sales.
That has led many in Colorado to claim that its state is the leader of the American cannabis industry, with Denver being the capital. I have traveled to Denver on many occasions, and it’s a beautiful place. I would much rather live there than in California. However, California is now the undeniable champion of America’s cannabis industry, if it ever lost that designation in the first place.
California’s population is more than Oregon, Colorado, Washington State, Alaska, Maine, Nevada, and Massachusetts (all the other legal states) combined, and with more than 10 million people to spare. And that doesn’t even include tourists! California’s cannabis consumer base is going to be MASSIVE. If investors and entrepreneurs weren’t scrambling to get into the cannabis industry yet, they are now, and specifically into California.
Right now legal adult use sales are allowed in Colorado, Washington, Oregon and Alaska, and on a limited basis Nevada. Massachusetts is on a path to legalized sales in the near future, and Maine’s industry continues to be in disarray after ever since its Governor vetoed an industry implementation measure. Washington D.C. does not allow an adult use industry to exist due to various federal reefer madness budgeting factors, despite D.C. voters approving legalization by an overwhelming margin in 2014.
Of the states that have implemented a regulated cannabis industry, I think that Oregon provides the most insight into what things will look like in California in the future. As much as possible at least. California recently released cannabis industry regulations. Just the Bureau of Cannabis Control’s regulations are 115 pages. The California Food and Agriculture and California Department of Public Health also issued their own regulations.
The regulations being proposed are such that there appears to be no limit on licenses, which will likely lead to a flood of big entities storming California, as pointed out by Hezekiah Allen in a recent article in the Los Angeles Times:
At one time, 4 acres was under consideration, but preliminary information from the state earlier this week indicated a maximum 1-acre cap would be set on most cultivators.
But the regulations issued Thursday did not include that language, instead placing limits on only certain medium-sized growers’ licenses. Beyond those, “there is no limitation for the other categories of licenses,” Steve Lyle of the state Department of Food and Agriculture said in an email.
Hezekiah Allen, executive director of the California Growers Assn., an industry group, said the rules appeared to allow large businesses to obtain “as many licenses as they could afford,” opening the way for vast cannabis grows that could threaten the viability of small farms, long the backbone of the state industry.
California “could have just opened the door for well-capitalized interests … to really jeopardize the success of the marketplace,” he said.
Just as Oregon has been flooded by corporate cannabis interests, so too will California, and on a scale that America has never seen before. Large cannabis companies have always existed in California, but they usually started from cottage industry beginnings. Now those same companies, and everyone else, are going to be competing with companies with deep pockets from other states, Canada, and beyond.
Just like Oregon, California had recently passed state-level medical cannabis industry legislation prior to voters approving legalization. In Oregon lawmakers approved legislation that regulated the medical cannabis industry one year before voters approved legislation. In both states, lawmakers used the opportunity to tighten up the medical marijuana side of the industry at the same time they were coming up with recreational industry regulations. Colorado and Nevada both already had an established regulated medical marijuana framework in place when rec came on line, Washington had no medical industry regulations at the state level, and Alaska is its own unique animal that is far different than any other state (and likely to stay that way) so it’s not as good for comparison purposes.
Oregon, albeit a micro version, is the closest landscape to California’s current landscape for comparison purposes, especially considering that both states have some of the oldest cannabis communities in America. Both states have multiple generations of families that have lived a way of life that is heavily dependent on the cannabis plant, especially in Southern Oregon and Northern California. Just as Southern Oregon cannabis community members have seen their way of life turned upside down, I see the same likely to occur in Northern California, which makes my heart heavy.
Mega gardens are going to flood into California, and the state is going to have more cannabis than it knows what to do with. I definitely hand it to Californians, they consume a lot of cannabis. But not so much cannabis that it will support the amount of cannabis that is about to be grown in the state, not even with all of the tourists that visit California on a regular basis. On the consumer side, it will be a beautiful time to be alive because cannabis is going to get extremely cheap.
But for those that are looking to carve out their own piece of the California cannabis industry pie and hoping that it will be all they need to support themselves financially…things are not looking good. Just ask people in Oregon. Colorado has over a third more people compared to Oregon, but has less than half as many cannabis growers. And whereas Colorado’s grower population is not growing at a very big rate, Oregon’s is ballooning with no end in sight. A similar ratio exists on the retailer side, and Oregon doesn’t even have the nearly the level of tourism spending that Colorado does (roughly half as much, according to public data).
This is not to say that there won’t be rags-to-riches success stories out of California, because there certainly will be. But those stories will be the exception, not the rule. For the most part it will just be the rich getting richer, or in the case of most of Oregon, just a bunch of people losing money while they get ruthless on everyone else. I am not saying this to be a downer, I am saying it to warn people so that they can plan accordingly. If you live in California, and you are wanting to see the cottage industry survive what is about to occur, my advice is to band together and unite behind one voice. If not, know that while you are bickering with other cottage industry members, big business will be working around the clock to pull the rug out from under you.