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California Inches Towards Interstate Cannabis Agreements

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It’s no secret that state cannabis markets across the nation are suffering badly. Because of I.R.C. 280E, lack of access to financial institutions, massive operational expenses, plunging prices, and just gluts of production, it’s not pretty out there. However, there’s a newish light at the end of the tunnel, at least for California and other states that are game: interstate cannabis agreements. If interstate cannabis agreements open up between cannabis states, then maybe just maybe the cannabis industry can be pulled back from the brink of its hard landing in 2023.

Interstate cannabis agreements

Recall in September of last year, Governor Gavin Newsom signed Senate Bill 1326 into law (and it became effective on January 1 of this year), introducing the possibility of interstate cannabis agreements. California wasn’t the first state to do this. Oregon actually did it in 2019. Under SB 1326:

MAUCRSA specifies that its provisions shall not be construed to authorize or permit a licensee to transport or distribute, or cause to be transported or distributed, cannabis or cannabis products outside the state, unless authorized by federal law. This bill would make an exception to the above-described prohibition and would authorize the Governor to enter into an agreement with another state or states authorizing medicinal or adult-use commercial cannabis activity, or both, between entities licensed under the laws of the other state or states and entities operating with a state license pursuant to MAUCRSA, provided that the commercial cannabis activities are lawful and subject to licensure under the laws of the other state or states.

Pursuant to SB 1326, these interstate cannabis agreements would be between states. Not licensees. Licensees would still need to engage in contracts with each other for the actual import, export, and distribution of cannabis across state borders. Governor Newsom would be able to enter into these interstate cannabis agreements with governors from other states so long as:

  1. The commercial cannabis activities are lawful and subject to licensure under the laws of the contracting state; and
  2. With respect to the interstate transportation of cannabis or cannabis products, the agreement prohibits both of the following: (a) The transportation of cannabis and cannabis products by any means other than those authorized under both the laws of the contracting state and the regulations of the [California Department of Cannabis Control (“DCC”)]. (b) The transportation of cannabis and cannabis products through the jurisdiction of a state, district, commonwealth, territory, or possession of the United States that does not authorize that transportation.

Under SB 1326, the interstate cannabis agreement also requires that the contracting state agree that its cannabis licensees be bound by California’s requirements around public health and safety, track and trace, testing, inspection, packaging and labeling, and adulterated and misbranded cannabis. The contracting state must also impose “restrictions upon advertising, marketing, labeling, or sale within the contracting state that meet or exceed the restrictions” in California for the same. And all California taxes apply, too.

Further, out of state licensees (“foreign licensees”) cannot engage in commercial cannabis activity in California “without a state license, or engage in commercial cannabis activity within a local jurisdiction without a license, permit, or other authorization issued by the local jurisdiction.” So, foreign licensees will also be plagued by California’s local control issues if they seek to do business in one of our cities or counties that allows for commercial cannabis activity.

The federal contingency for interstate cannabis agreements

Interstate cannabis commerce would be a dream for many licensees, and especially this kind of interstate commerce which would only: (a) be between cannabis states; and (b) involve existing state licensees (and not, let’s say, Costco or Amazon (yet)). But the passage of SB 1326 didn’t automatically create interstate cannabis commerce for California licensees. In fact, it’s creation is dependent upon:

  1. Federal law changing to allow for the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses, i.e., legalization.
  2. Federal law enacted that specifically prohibits the expenditure of federal funds to prevent the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses.
  3. The Department of Justice (“DOJ”) issuing an opinion or memorandum allowing or tolerating the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses.
  4. The California Attorney General issuing a written opinion through the process . . . that implementation of interstate cannabis agreements will not result in “significant legal risk” to the State of California based on review of federal judicial decisions and administrative actions.

DCC and the California Attorney General

As reported by Politico last week, the DCC is going for option 4, which is really the only realistic choice right now. In an eight-page request and de facto legal brief, the DCC asks the State Attorney General’s office for an opinion in regards to whether interstate cannabis agreements will result in “significant legal risk” to the state, given that cannabis remains an illegal Schedule I controlled substance under the federal Controlled Substances Act (“CSA”).

To assist the State A/G with this request, the DCC articulates three legal arguments as to why California won’t ever feel the heat from the feds if Governor Newsom starts signing interstate cannabis agreements:

  1. The feds can’t dragoon the states into adopting or enforcing federal laws. Invoking the “anti-commandeering principle“, Congress can’t interfere with a state’s right to pass its own laws where Congress has not already legislated directly– even if interstate commerce is triggered. While the federal government can regulate private individuals, it cannot do the same to states. The DCC then requests that the state A/G forego a preemption analysis since it’s not relevant here and where no “positive conflict” with federal law exists anyway. After all, the feds can still prosecute individuals (and cannabis businesses) that choose to engage in interstate commerce.
  2. The CSA doesn’t criminalize states legalizing cannabis, and state officials are accordingly immune if they enforce and/or administer state cannabis laws and rules. The DCC also tells the State A/G not to sweat issues like aiding, abetting, and conspiracy for state officials and employees in this context because they’re not actually engaged in cannabis trafficking that violates the CSA. Lastly, the DCC cites to Gonzalez v. Raich to point out that the CSA doesn’t distinguish between interstate and intrastate commerce: both are equally as illegal under the CSA. In any case, California won’t suffer any greater liability than what already exists if interstate cannabis agreements are a go.
  3. As a throwaway argument, in regards to medical cannabis interstate commerce agreements, the DCC states that California is also safe from “significant risk” of federal enforcement because of the 2014 Rohrabacher-Farr-Blumenauer Amendment. The power of that Amendment to stop the feds from criminally prosecuting medical cannabis businesses (even though it doesn’t change the CSA) was tested in real time in California in the MAMM case in 2015, and then confirmed again in the McIntosh case in 2016 (at least for states in the Ninth Circuit).

States rights and DOJ enforcement

As I see it, the DCC is really hanging its hat on states’ rights and dual sovereignty in pushing the State A/G to opine that there’s no “significant legal risk” to California because of SB 1326. The anti-commandeering doctrine is not actually present in the Constitution, itself, though. The U.S. Supreme Court created the doctrine based on the 10th Amendment in two cases, New York v. United States in 1992, and Printz v. United States in 1997. The most recent application of the doctrine came in the 2018 decision in Murphy v. NCAA regarding New Jersey’s commencement of legal sports betting despite federal prohibition of the same. The U.S. Supreme Court sided with Jersey, ruling that “Congress may not simply ‘commandeer the legislative process of the States by directly compelling them to enact and enforce a federal regulatory program.”

I think the DCC is right about the anti-commandeering principle. I think the weakness though is around interstate commerce, and the DCC can’t ignore the 2005 Raich case, which holds that Congress’ Commerce Clause authority includes the power to prohibit the local cultivation and use of cannabis in compliance with California law.

The DCC likely rightly points out, however, that the foregoing doesn’t matter for the State. The State and its officials are highly unlikely to be prosecuted for anything at all. At most, the federal government might sue California to try to overturn SB 1326 (although I don’t see that happening under President Biden’s DOJ). Private citizens are the ones who will be on the line for enforcement because California wouldn’t act if the feds started punishing people for moving inventory under SB 1326 (that’s also why no positive conflict exists).

I think even if the DCC is successful in getting a positive opinion from the State A/G,  what really matters is what enforcement by the DOJ (which is essentially controlled by the U.S. Attorneys in each District) looks like for private cannabis enterprise. In all, interstate cannabis agreements may be a political win for California, they will mean nothing if the DOJ doesn’t also play ball when it comes to enforcement.

For more on cannabis interstate commerce legislation, check out the following posts:



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Let Cops Smoke Weed! – Possible Bill Would Exempt Police from State Protections Around Cannabis Use

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Let Cops Smoke Weed!

 

Should cops be allowed to smoke weed? Some are staunchly against it, but this stoner here believes it would make the world a better place. Love them or hate them, cops have an incredibly stressful job. They regularly encounter dangerous situations, witness traumatic events, and deal with hostile people. It’s no surprise that many officers suffer from PTSD, anxiety, and other mental health issues.

 

On top of that, the public’s perception of police is largely negative these days. Incidents of police brutality and abuse of power have eroded trust in law enforcement. Of course, not all cops are bad apples, but the reputation has taken a major hit. This animosity and stigma undoubtedly add to the already overwhelming stress and pressures they face.

 

Nonetheless, this doesn’t mean police officers should be excluded from cannabis use. In fact, regulated access to marijuana could potentially allow cops to finally connect with the public they are sworn to protect and serve. By legally partaking in the same vice that millions of law-abiding citizens enjoy, a human bridge could be built between the police force and the people.

 

Rather than being seen as an authority figure disconnected from the lives of ordinary citizens, a cop smoking a joint in their off-hours makes them significantly more relatable. It humanizes them. If regulated responsibly, cannabis use among law enforcement could paradoxically improve police-community relations and their mental wellbeing.

 

However, a new California bill threatens to move in the opposite direction. SB 1264 would prohibit various categories of public workers, including law enforcement officers, from lawful marijuana use that is currently protected under state employment laws. In this article, we’re going to explore why this proposed amendment is a step backwards and a terrible idea that could have serious negative ramifications.

 

 

The California bill in question, SB 1264, was originally introduced last month as a minor technical fix to an existing law protecting workers from employment discrimination over legal marijuana use. However, it took a controversial turn this week when it was substantially amended in committee with an entirely new section that would roll back those protections for various categories of workers.

 

The new amendment, sponsored by Republican Senator Shannon Grove, specifically removes the employment protections for “employees in sworn or nonsworn positions within law enforcement agencies” who have job functions related to:

  1. Apprehension, incarceration, or correction of criminal offenders

  2. Civil enforcement matters

  3. Dispatch and public safety communications

  4. Evidence gathering and processing

  5. Law enforcement records

  6. Animal control

  7. Community services duties 8 ) Public administrator or public guardian duties

  8. Coroner functions

This proposed change comes just months after the Commission on Peace Officer Standards and Training removed questions about marijuana from police job application forms, stating that several forms were “modified to remove inquiries about a candidate’s prior cannabis use.”

 

The legislation currently sits before the Senate Rules Committee after Grove’s amendments were adopted on Tuesday. If passed, it would represent a major setback for the employment protections that were established by two pieces of legislation signed into law in 2022 and 2023.

 

Those laws, which took effect on January 1st of this year, made it illegal for California employers to ask job applicants about past cannabis use or penalize most employees for lawful off-duty marijuana use. Certain exceptions were already included, such as workers in the building/construction trades and those requiring federal background checks, but this new amendment extends those exceptions even further.

 

Specifically, the 2022 law states it is “unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalizing a person, if the discrimination is based upon…off-duty marijuana use.”

 

The separate 2023 law prohibits employers from “requesting information from an applicant for employment relating to the applicant’s prior use of cannabis.”

 

If SB 1264 passes with the new amendment, it would nullify those protections for a huge swath of law enforcement employees across the state. From police officers to animal control workers to coroners, an entire sector of public service workers could once again face discrimination and job consequences for their personal cannabis use outside of work hours.

 

The potential rollback of such recently-enacted worker protections has voter advocacy groups and cannabis supporters sounding the alarm about the proposed changes. With the bill now awaiting a Senate Rules Committee vote, all eyes are on whether California lawmakers will side with the police unions pushing for the amendment or the wave of pro-cannabis worker policies that have been advancing.

 

 

If lawmakers are going to single out cannabis and prohibit its use among certain public employees like law enforcement officers, a glaring double standard arises: Why not enact the same draconian policies for alcohol?

 

By virtually every objective metric, alcohol is more dangerous and detrimental than cannabis. It’s more toxic, more addictive, and causes significantly more health issues and societal harm. Alcohol dependency can lead to life-ruining consequences like job loss, domestic violence, and севере organ damage. The same simply cannot be said about cannabis dependence.

 

Perhaps most importantly in the context of police work, alcohol is clearly linked to increased violent and irrational behavior in a way that marijuana is not. Over 40% of all violent crimes involve the presence of alcohol, according to data from the Department of Justice. Excessive drinking has been identified as the most significant predictor of intimate partner violence.

 

On the other hand, cannabis does not appear to be a major factor in violent crimes. In fact, some studies have found that marijuana use is associated with decreased domestic violence. While certainly not an excuse, alcohol’s disinhibiting effects resulting in aggressive behavior are well-documented. This makes the potential exception for law enforcement particularly concerning from a public safety standpoint.

 

Interestingly, there are no blanket policies prohibiting police officers and law enforcement from using alcohol off-duty, despite it being an objectively more impairing and destructive substance. An officer can get blindingly drunk on their day off, showing up to work hungover and potentially exhibiting residual impairment, and face no disciplinary action in most jurisdictions as long as they are no longer intoxicated on the clock.

 

Yet if that same officer consumed cannabis responsibly in their personal time, they could potentially be reprimanded or even fired solely due to outdated cannabis stigma rather than any evidence of real impairment or safety risks. This is fundamentally hypocritical.

 

The key difference is that the mere presence of THC metabolites can be detected through standard drug testing, weeks or even months after impairment from consumption. However, this alone does not indicate intoxication or impairment – it simply shows evidence of prior cannabis use, just as alcohol metabolites would indicate past alcohol consumption.

 

By specifically targeting cannabis in this way, the implicit argument seems to be that marijuana is so profoundly mind-altering and perception-warping that any prior use, regardless of timeframe, fundamentally compromises an individual’s ability to perform their duties. This is an argument not supported by science or data.

 

Perhaps this antiquated “reefer madness” mentality persisting in some lawmakers is the real concern driving these efforts. By treating cannabis as a unique demon to be stamped out at all costs, even among responsible adults, they reveal a dogmatic belief that marijuana is inherently immoral and eroding to society. This puritanical viewpoint fails to align with current realities around the plant’s mainstream acceptance and legalization in much of the country.

 

 

Police officers deal with immense stress and traumatic situations on a regular basis as part of their job duties. The consequences of this unrelenting pressure often manifest as PTSD, anxiety, depression and other mental health issues among law enforcement. Cannabis provides a non-toxic avenue to help manage these conditions without the dangerous side effects of alcohol or pharmaceuticals.

 

A 2022 study published in the Journal of Clinical Psychology found that cannabis consumption is associated with increased empathy levels and ability to share the emotional experience of others. For police officers, who can sometimes lose sight of the humanity in the communities they patrol, this empathy-promoting effect could be invaluable.

 

With more empathy, cops may be less inclined to strictly enforce draconian laws that criminalize victimless crimes like personal marijuana cultivation or possession. They could start focusing more resources on actual violent crime that damages society. A force occupied with busting down doors over roaches is one that lets murderers and rapists run free.

 

A more relaxed, empathetic police force could foster greater trust and cooperation with the public they serve. When the people view law enforcement with less fear and animosity, it becomes harder for real criminals to hide and operate within those communities. Aligning police and citizens makes it a tough day for crime.

 

At its core, cannabis is a plant that millions worldwide use to unwind, relax, and bring joy and peace into their lives. To declare that certain categories of public servants don’t have the same fundamental human right to make this choice is to assert a repugnant authoritarian notion – that there are two classes of people: those subjected to the law, and those upholding it.

 

For officers risking their lives daily, being denied a plant-based reprieve from their immense stress and trauma is not just contradictory policy, it’s institutionalized discrimination cloaked in outdated reefer madness. If we truly want equality in this country, we need to start by treating everyone equally, regardless of their profession or civilian status.

 

The same laws, freedoms, and human rights need to apply universally.

 

POLICE USE WEED AFTER WORK? READ ON…

CAN POLICE USE CANNABIS NEW JERSEY

HOW NEW JERSEY STARTED A TALK ABOUT COPS USING WEED AFTER WORK!



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24 Illegal Weed Shops for Every 1 Legal Dispensary

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ny illegal weed shops

In 2024, after three years of ups and downs, New York’s recreational cannabis market began to gain momentum, notably marked by the opening of approximately 50 licensed dispensaries so far this year.

 

However, these licensed retailers, totaling about 85, find themselves vastly outnumbered by over 2,000 unauthorized head shops. These establishments have drawn complaints for diverting customers, selling to minors, and attracting criminal activity.

 

This swift and audacious incursion has left many frustrated with the government’s slower and more stringent approach to expanding the legal market. It has emerged as the primary challenge confronting the rollout, as authorities grapple with fulfilling the state’s pledge to provide a $5 billion market to a range of small businesses and individuals adversely affected by past anti-marijuana policies.

 

“There needs to be swift action on this,” remarked James Stephenson, co-founder and CEO of oHHo, a wellness brand reliant on dispensaries for distributing its cannabis-infused chocolates, gummies, and seltzers. “There can’t be one group adhering to the rules while others operate outside of them.”

 

Sure, here are some suggested titles for the subheading sections:

 

Challenges in Dispensary Rollout

 

As illicit shops proliferated, the opening of legal dispensaries hit a snag, with months-long delays due to lawsuits, the intricate rule-making process, and the state’s failure to fulfil its commitment to fund the leasing and refurbishing of the initial 150 licensed dispensaries. Currently, only 10 stores are operational with state assistance, while another 375 dispensaries, licensed for nine months or longer, remain closed.

 

Governor Kathy Hochul, expressing growing dissatisfaction, recently initiated a review of the Office of Cannabis Management, the entity overseeing the rollout. Additionally, she proposed legislation to empower local authorities to crack down on unlicensed shops and landlords complicit in their operations. Furthermore, she introduced a bill to reduce taxes that inflate the prices of legal cannabis products, a move widely supported in the State Legislature.

 

The review commenced shortly after Damian Fagon, the cannabis agency’s chief social equity officer, was placed on administrative leave pending a misconduct investigation. This action followed allegations by Jenny Argie, the founder of a licensed cannabis business, accusing Fagon of retaliation after she recorded a conversation with him, subsequently cited in an article criticizing the agency.

 

Argie subsequently filed a lawsuit against the state, joining a slew of legal challenges against the agency. These include allegations that the state’s social equity policies unfairly favor women and minorities over white men, and efforts to halt the use of lotteries in determining the order of new application consideration. Other lawsuits contest decisions regarding dispensary locations and oppose the use of taxpayer funds to support them.

 

Chris Alexander, the executive director of the state cannabis agency, has stood by his agency’s deliberate and systematic approach to licensing businesses owned by a diverse array of individuals, which regulators believe can thrive in a notoriously challenging industry. He highlights the shortcomings experienced by states that rushed their processes. Additionally, officials express frustration that the criticisms of the rollout have overshadowed the accomplishments made in the two years since the agency’s inception.

 

Licensed Dispensaries vs. Illicit Market

 

New York currently boasts more licensed recreational dispensaries than any other state on the East Coast, second only to Massachusetts. These establishments are owned by individuals with diverse backgrounds, including those with criminal records, veterans, women, nonprofits, and individuals of Black, Latino, and Asian descent. These dispensaries have significantly contributed to job creation in a retail sector grappling with the aftermath of the pandemic, alleviated the state’s surplus of unsold cannabis, and generated substantial tax revenue, amounting to millions of dollars. Many of these businesses are profitable and expanding, with numerous newcomers on the brink of breaking even.

 

Despite these achievements, licensed dispensaries face challenges in attracting consumers away from illicit shops, as many consumers are unaware or indifferent to the distinction between licensed and unlicensed establishments. In the first full year of legal sales, state-licensed dispensaries in New York generated approximately $150 million, considerably less than the $673 million generated by dispensaries in New Jersey, where recreational sales commenced eight months prior.

 

Unlike New Jersey and Massachusetts, which permitted medical dispensaries to transition into recreational sales, New York initially prioritized retail licenses for individuals with criminal records and only recently allowed medical dispensaries to serve the public. Critics, including some supporters, argue that this decision exposed the program to legal challenges, leading to delays in the rollout while the illicit market flourished.

 

With limited avenues to sell their products, cannabis farmers in New York are facing financial hardships amidst an expanding market.

 

During a recent Cannabis Control Board meeting in Brooklyn, the first since the governor ordered a review, several applicants and licensees expressed their frustrations. Some defended the regulators, acknowledging the daunting task of developing the industry with insufficient resources.

 

Reform Efforts and Support Initiatives

 

The board passed a resolution that exempts new licensing fees for those wishing to continue cultivation for the state or establish craft businesses.

 

Damien Cornwell, president of the Cannabis Association of New York, which advocated for the exemption, argued that the fees, reaching as high as $40,000, pose a significant barrier for farmers. Many have depleted their funds on taxes while awaiting payment from retailers for product orders.

 

“They’re cash-strapped,” remarked Mr. Cornwell, who also operates a dispensary named Just Breathe in Binghamton. “Their liquidity is insufficient for this endeavor.”

 

Despite numerous raids by local and state authorities on illicit stores, hefty fines and pressure on landlords to evict unlicensed businesses, these retailers persist undeterred. They often reopen shortly after raids and contest fines through lengthy administrative hearings.

 

In addition to Governor Hochul’s proposals for enforcement and tax reform, state legislators are considering measures to provide financial aid to struggling farmers and safeguard a special licensing program for individuals with prior marijuana-related convictions from legal challenges. New York City prosecutors are also seeking expanded authority to evict shops involved in the marketing and sale of cannabis.

 

“I want an effective system,” stated Jeremy Cooney, a state senator from Rochester and chairman of the cannabis subcommittee.

 

Pilar DeJesus, a housing activist and advocate for cannabis legalization, emphasized that the state should offer more assistance to individuals adversely affected by anti-cannabis policies in establishing legal businesses.

 

The demand for such support has surged. Last autumn, the Office of Cannabis Management received 7,000 license applications, with approximately 4,800 applicants qualifying for mandated loans and grants. These funds are designed to aid businesses owned by low-income individuals with previous arrests, as well as by women, minorities, veterans, and struggling farmers.

 

While the Office of Cannabis Management offers some reimbursement to organizations aiding applicants, Ms DeJesus argued for increased funding directed towards grassroots organizations already assisting in developing the necessary skills for operating businesses in the cannabis industry.

 

“We’re talking about a range of skill sets that the community lacks due to barriers created by the war on drugs,” she emphasized.

 

Bottom Line

 

New York’s cannabis industry faces significant hurdles as it navigates the challenges of legalization. Despite progress in licensing dispensaries, the proliferation of illicit shops remains a pressing concern, highlighting the need for swift regulatory action. Governor Kathy Hochul’s proposed reforms and support initiatives signal a commitment to addressing these issues, but substantial work lies ahead to ensure the industry’s equitable and sustainable growth. Collaboration between regulators, legislators, advocates, and industry stakeholders will be crucial in overcoming obstacles and realizing the full potential of New York’s cannabis market.

 

NEW YORK TRIES TO SHUT DOWN ILLEGAL WEED SHOPS, READ ON…

NY TRIES TO SHUT DOWN ILLEGAL MARIJUANA SHOPS

NY TRIES TO SHUT DOWN ILLEGAL CANNABIS SHOPS, GOOD LUCK SAYS CA!



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California’s Cannabis Industry Conundrum and the Road Ahead

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Despite continuously surpassing every other state with recreational cannabis in terms of total retail sales, California’s cannabis industry has faced continuous and far-reaching issues on multiple levels that have only spread even further. From declining sales that result in hundreds of millions less in total retail sales to a massive illicit market that the state ignores, problems abound. California has even seen a pattern of dispensaries and cultivation facilities across California being burglarized and robbed. Suffice it to say, the state’s industry has colossal problems, the magnitudes of which haven’t been seen by any neighboring state.

The issues don’t even include the many internal issues that the California industry is facing, such as unpaid debts and taxes equaling millions and a lackluster effort at social equity inclusion. In fact, issues regarding the illicit market are moving into other states and impacting their total sales as well. In just the first year of operation, the Unified Cannabis Enforcement Taskforce seized over $312 million in illicit cannabis in 2023, which amounts to more than the total cannabis sales of entire states combined. But as an aside, you can read my colleague, Griffen Thorne’s take on why those numbers are insignificant. Either way, given how admittedly widespread the illicit market of cannabis in California is, those several hundred million dollars in illegally grown cannabis seized by the state is just a miniscule fraction of the colossal amount of the total scope of that illegal and unregulated market.

Internal Struggles and Regulatory Hurdles

The ramifications of these many shortcomings and industry-wide problems are being felt like ripple effects that never truly stop flowing. Like the heads of a hydra beast, hardships and disadvantages spring up from one another when dealing with an industry as large yet frequently impeded upon such as the California industry. Worse even, the billion-dollar industry continues to considerably drop in total annual sales. In 2022, sales dropped over eight percent, equaling over $400 million and the total sales figure from 2023 shows an unfortunately similar pattern. In 2023, California dispensaries sold a total of $5.1 billion in total sales, which itself is a 4.7 percent decline in sales from the already slumping 2022.  In total, sales are down a considerable 11 percent from the highest point of sales in 2021 and month over month show painfully little sign of improvement.

Even among fully legal and compliant operators in California, delayed and delinquent tax payments are a growing issue, with hundreds of different tax liabilities being owed by various cannabis businesses. With the exorbitant taxes that California cannabis operators must already regularly pay, the penalties caused by these delays and tax debts could very easily put a business under.

Bay Area Shutdowns and Rising Crime

Any industry professionals who felt falsely optimistic that the precarious conditions and problems that plague the California cannabis industry wouldn’t trail into 2024 were proven entirely wrong, as those widespread and multi-faceted issues have followed nearly every legal and compliant cannabis operator well into the new year. Already dealing with several other systemic and engrossing issues which are the aftermaths of ineffective policies, the Bay Area in particular has been once again hit with a new problem caused by the cascading effects of the many previously mentioned issues.

Cannabis businesses across the state have been either permanently or at least temporarily shutting down. This is bad news for everyone with a stake in the industry – from owners, to employees, to customers, to even neighbors who could benefit from the now-lost tax revenue.

Enforcement Failures and Policy Repercussions

Throughout the tumultuous year of 2023, Bay Area law enforcement continued to conduct several million-dollar operations, with these raids easily surpassing $10 million and thousands of illegally cultivated cannabis plants. Even more concerning, multiple firearms and thousands in cash were also found in these illegal grows. But again, this enforcement is declining and not nearly enough.

What has occurred, and continues to unfold, is an existential crisis for the entire cannabis community. The cannabis industry and legalization were founded on the premise of ending the failed War on Drugs and ceasing the incarceration of mostly black and brown individuals for victimless crimes. However, the current strain on cannabis communities, influenced by the illicit market, has reached a critical point, and business owners are experiencing the increasingly negative impacts of long-term enforcement gaps.

The Path Forward: Challenges and Solutions

What activists fail to acknowledge is that we are now facing the consequences of policies promoted for decades. The rallying cry, “Nobody should go to jail for a plant,” must now evolve. It’s time to end the War on Drugs and begin enforcing regulations to protect the industry. Creative enforcement strategies, beyond imprisonment, must be explored. Enforcement agencies and the cannabis industry, despite their historical distrust, will need to collaborate to achieve this. A short-term policy of stronger enforcement through collaboration can help reduce predominantly illicit sales. Eventually, this will lead to broader consumer acceptance of safe cannabis, purchased from reputable sources. This combined with tax relief can prevent this industry from falling into further despair.

As 2024 progresses, the multifaceted crisis confronting the California cannabis industry is expected to deteriorate further unless substantial changes are implemented by key organizations such as the Department of Cannabis Control, the Attorney General’s Office, and various law enforcement bodies. The shift from advocating the end of the Drug War to calling for enforcement marks a significant turning point. However, for meaningful change to occur, former advocates must collaborate with the government to creatively address these challenges and navigate the current storm.



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