Over two dozen California jurisdictions may soon opt-in for legal cannabis sales.
Currently, 28 California towns, cities, and counties will consider putting cannabis ballot measures in front of voters in the fall elections, MJBizDaily reported. This could be the largest crop of ballot initiatives to expand the industry's reach since the Golden State legalized recreational cannabis under Proposition 64 in 2018.
The ballot measures may potentially create 125 to 150 commercial licenses for new weed businesses, should voters approve them all. One measure will allow residents of Tehama County to decide whether sales of cannabis should be permitted in the area, for the first time ever.
But most of the initiatives relate to marijuana businesses in some of the state’s most populous counties, such as Los Angeles, Sacramento, and San Diego. Some are funded by deep-pocketed existing cannabis businesses, like Catalyst Cannabis Co., which has donated $500,000 to the fall campaigns.
California is considered the world’s largest cannabis market, with sales generating $300 million in tax revenue in the first quarter of 2022 alone — with sales expected to top $6.37 billion this year.
Despite these sales figures, the state’s Department of Cannabis Control estimated 61% of California's cities and counties do not allow cannabis retail businesses — and 56% do not allow any kind of cannabis business, be it cultivation, medical, retail, or other operation.
In Orange County, the third-largest county in the state, only one city has allowed cannabis retail sales. Elsewhere in the state, residents must travel up to 100 miles to access legal cannabis shops, despite the fact that 57% of voters approved Prop. 64, according to MJBizDaily.
Even for cannabis businesses in jurisdictions where commercial activity is permitted, the realities of doing business are grim. Prohibitive taxes at practically all levels of the value chain — as well as the state's unwillingness to limit the number of license holders — led cannabis business owners to protest at the end of 2021. In response, Governor Gavin Newsom temporarily eliminated a prohibitive state cultivation tax and announced that an excise tax on distributors would not be raised.
One aspect of this crisis is an acute issue of cannabis oversupply in the state — one with which advocates hope that an expansion of retail options can assist, eliminating bottlenecks. At the moment, the state is producing three times as much legal weed as it can consume, the Humboldt County Growers Alliance told Forbes.
Those figures don’t take into account the state’s apparently-burgeoning illegal market. In a recent LA Times report based on the analysis of satellite imagery, the publication estimated that unlicensed farms outnumbered the licensed ones by a stunning 10 to 1 ratio, particularly in many high-production cannabis-growing areas.
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