Five years after cannabis legalization, California is awash with signs of an apparently booming industry. Californians can toke on Justin Bieber-branded joints and ash their blunts in Seth Rogen’s $95 ceramics. They can sip on THC-infused seltzers, relax inside a cannabis cafe, and get edibles delivered to their doors.
But behind the flashy facade, the legal weed industry remains far from the law-abiding, prosperous sector many had hoped for. In fact, it’s a mess.
Voters passed a law in November 2016 making recreational marijuana legal. But today, the vast majority of the market remains underground – about 80-90% of it, according to experts.
Because that 2016 law, known as Proposition 64, gave municipalities the power to ban weed as they see fit, the majority of cities and counties still don’t allow the sale of cannabis, inhibiting the growth of the legal market.
In the places that do allow pot shops and grows, business owners say high taxes, the limited availability of licenses, and expensive regulatory costs have put the legal market out of reach. And many of the Black and brown entrepreneurs who were supposed to benefit from legalization have actually ended up losing money. Meanwhile, consumers remain confused about what’s legal and what’s not.
For now, the only way legal, state-licensed businesses say they are able to stay profitable is to keep one foot in the illegal, unlicensed market – often called the “legacy” or “traditional” market.
Cannabis products at a dispensary in Los Angeles, California. Photograph: Lucy Nicholson/Reuters
“You have to go into the traditional market to stay afloat,” explains the cannabis consultant Ophelia Chong. “Considering California is the home of cannabis, we messed it up in so many ways.”
California’s cannabis conundrum speaks to the enormous challenges of bringing a gray market that for decades has thrived in the shadows into the light. But the problems run deeper than any flaws in Proposition 64, or actions taken over the past five years. Rather, the state’s weed economy is in disarray largely because of everything that happened in the two decades before Prop 64 passed.
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