California's Marijuana Farmers Are Slow to Join the Legal, Regulated System

California's Marijuana Farmers Are Slow to Join the Legal, Regulated System

The vast majority of Californias marijuana growers have yet to try to move into the states new legal regulatory framework, leaving big questions looming around whether they can survive in the brave new world of legal weed, whether a substantial illicit market will remain, and whether that anticipated tax revenue windfall will actually materialize.

According to a report released Monday by the California Growers Association, representing mainly small-scale growers across the state, fewer than 1% of growers have been licensed so far. Thats a measly 534 licensed growers out of an estimated 68,000 in the state.

The report, An Emerging Crisis: Barriers To Entry In California Cannabis, identifies a number of obstacles for small producers and warns that those issues must be addressed if participation is to increase and a post-legalization law enforcement crackdown is to be avoided.

Without broad participation, legalization will look a lot like prohibition, with many illicit growers, the report concludes. The current system will not achieve its goals without fundamental and structural changes that allow small and independent businesses to enter into compliance.

Obstacles to participation include lack of access to the financial sector. the high costs of complying with regulatory and tax burdens, state regulations that seem perversely designed to weed out small competitors, slow-moving or sometimes hostile local governments, and a saturated market.

As one Sonoma County cultivator put it in the report:

State and local governments need to make course corrections now or else a staggering number of businesses will fail, while staggeringly few enjoy significant growth, the report warned. Many of the best growers the most dedicated and passionate artisans who can add tremendous value to the state marketplace are the ...

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