What Happened to California's 'Bustling' Recreational Marijuana Market?

Hey, don't blame me --- I voted against this stupid legalization plan.

At LAT, "One year of legal pot sales and California doesn’t have the bustling industry it expected. Here’s why":

California’s legal pot market hasn’t performed as state officials and the cannabis industry had hoped. https://t.co/mQaVVpbCO0

— Los Angeles Times (@latimes) December 27, 2018

When Californians voted in 2016 to allow the sale of recreational marijuana, advocates of the move envisioned thousands of pot shops and cannabis farms obtaining state licenses, making the drug easily available to all adults within a short drive.

But as the first year of licensed sales comes to a close, California’s legal market hasn’t performed as state officials and the cannabis industry had hoped. Retailers and growers say they’ve been stunted by complex regulations, high taxes and decisions by most cities to ban cannabis shops. At the same time, many residents are going to city halls and courts to fight pot businesses they see as nuisances, and police chiefs are raising concerns about crime triggered by the marijuana trade.

the numerous challenges when he takes office in January as legislators hope to send him a raft of bills next year to provide banking for the pot industry, ease the tax burden on retailers and crack down on sales to minors.

“The cannabis industry is being choked by California’s penchant for over-regulation,” said Dale Gieringer, director of California NORML, a pro-legalization group. “It’s impossible to solve all of the problems without a drastic rewrite of the law, which is not in the cards for the foreseeable future.”

After voters legalized marijuana two years ago under Proposition 64, state officials estimated in there would be as many as 6,000 cannabis shops licensed in the first few years. But the state Bureau of Cannabis Control has issued just 547 temporary and annual licenses to marijuana retail stores and dispensaries. Some 1,790 stores and dispensaries were paying taxes on medicinal pot sales before licenses were required starting Jan. 1.

State officials also predicted that legal cannabis would eventually bring in up to $1 billion in revenue a year. But with many cities banning pot sales, tax revenue is falling far short of estimates. Based on taxes collected since Jan. 1, the state is expected to bring in $471 million in revenue this fiscal year — much less than the $630 million projected in Gov. Jerry Brown’s budget.

“I think we all wish we could license more businesses, but our system is based on dual licensing and local control,” said Alex Traverso, a spokesman for the state Bureau of Cannabis Control, referring to the requirement that cannabis businesses get permission from the state and the city in which they want to operate.

Less than 20% of cities in California — 89 of 482 — allow retail shops to sell cannabis for recreational use, according to the California Cannabis Industry Assn. Cities that allow cannabis sales include Los Angeles, Oakland, San Francisco and San Diego.

Eighty-two of Los Angeles County’s 88 cities prohibit retail sales of recreational marijuana, according to Alexa Halloran, an attorney specializing in cannabis law for the firm Solomon, Saltsman & Jamieson. Pot shops are not allowed in cities including Burbank, Manhattan Beach, Alhambra, Beverly Hills, Inglewood, Compton, Redondo Beach, El Monte, Rancho Palos Verdes and Calabasas.

“While some cities have jumped in headfirst, we've taken a deliberate approach,” said Manhattan Beach Mayor Steve Napolitano, “to see how things shake out elsewhere before further consideration. I think that's proven to be the smart approach.”

Voters have also been reluctant to allow cannabis stores in their communities.

Of the 64 California cities and counties that voted on cannabis ballot measures in the November midterm election, eight banned the sale of cannabis or turned down taxation measures, seven allowed sales and 49 approved taxes on pot businesses, said Hilary Bricken, an attorney who represents the industry. Among them, voters in Malibu approved pot shops while Simi Valley residents voted for an advisory measure against allowing retail sales.

Javier Montes, owner of Wilmington pot store Delta-9 THC, says he is struggling to compete with a large illicit market unburdened by the taxes he pays as a licensed business.

“Because we are up against high taxes and the proliferation of illegal shops, it is difficult right now,” Montes said. “We expected lines out of our doors, but unfortunately the underground market was already conducting commercial cannabis activity and are continuing to do so.”

Montes, who received his city and state licenses in January, says his business faces a 15% state excise tax, a 10% recreational marijuana tax by the city of Los Angeles and 9.5% in sales tax by the county and state — a markup of more than 34%.

He says there isn’t enough enforcement against illegal operators, and the hard times have caused him to cut the number of employees at his shop in half this year from 24 to 12.

“It’s very hard whenever I have to lay people off, because they are like a family to me,” said Montes, who is vice president of the United Cannabis Business Assn., which represents firms including the about 170 cannabis retailers licensed by the city of Los Angeles...

I mean, who could've foreseen the problems? (*Eye rolls.*)

Still more.