California’s emerging marijuana industry is being rattled by an array of unknowns, as the state races to issue its first licenses to grow and sell legal recreational pot on Jan. 1.
“We all have anxiety,” top state pot regulator Lori Ajax told an industry group Thursday. “It’s not going to be perfect.”
California voters in 2016 approved Proposition 64, which legalized recreational pot use for adults in the nation’s most populous state. It takes effect in 2018, when the new economy will unite recreational sales with the state’s two-decade old medicinal pot market.
With about three months to go before recreational sales kick off, it’s not yet clear how it all will work.
It will probably be late November before the state issues proposed regulations that will govern the new pot marketplace. Growers and sellers are wondering how an industry can function when some operators will have licenses, but others might not. Many operators do not have access to banks, since pot remains illegal in the eyes of the federal government. And a patchwork of local regulations is emerging across the state.
Ajax said she doesn’t know how many operators will come forward to seek licenses. It’s a critical question, since the state’s legitimate pot sales could be undercut by illegal operators.
Speaking in Long Beach, Ajax said the state is preparing to issue temporary licenses for growers, sellers, manufacturers and distributors on Jan. 1. She said her agency will be open for business on New Year’s Day.
But to obtain a state license, operators must first have a local license or authorization. Los Angeles is still working on its rules and the city is facing criticism that some operators could be cut out of the market, and it appears San Francisco will not be ready for legal sales in January and perhaps not for months.
The state will begin by issuing temporary licenses, good for four months. But those could also be extended, if necessary.
By legalizing recreational pot use, California is attempting to transform its vast marijuana black market into the nation’s biggest legal pot economy, valued at $7 billion.