Cal­i­for­nia reg­u­la­tor ad­mits to anx­i­ety as le­gal pot nears

Porterville Recorder - - FRONT PAGE - By MICHAEL R. BLOOD

LONG BEACH — In about three months, recre­ational mar­i­juana sales will kick off in Cal­i­for­nia, yet no one knows ex­actly how the pot econ­omy will work.

It could take un­til late Novem­ber for the state to is­sue reg­u­la­tions that will gov­ern the new mar­ket­place.

Mean­while, grow­ers and sell­ers are won­der­ing how the in­dus­try can func­tion when some oper­a­tors will have li­censes and oth­ers might not. There are also ques­tions about bank­ing and fed­eral law en­force­ment, since pot re­mains il­le­gal in the eyes of the U.S. govern­ment.

“We all have anx­i­ety,” top state mar­i­juana reg­u­la­tor Lori Ajax told an in­dus­try group Thurs­day. “It’s not go­ing to be per­fect.”

Last year, Cal­i­for­nia vot­ers ap­proved Propo­si­tion 64, which le­gal­ized recre­ational pot sales to adults in the na­tion’s most pop­u­lous state.

The law takes ef­fect in 2018, when newly le­gal­ized recre­ational sales will be merged with the state’s two-decade-old med­i­cal mar­i­juana mar­ket.

Ajax heard a range of con­cerns from opera-

tors and con­sul­tants who are try­ing to ma­neu­ver through a maze of new rules that will dic­tate where pot can be grown, how it’s tested, dis­trib­uted, taxed and sold.

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 and man­u­fac­tur­ers on Jan. 1. It ex­pects that busi­nesses that re­ceive li­censes will only work with oth­ers that hold them.

But that has alarmed oper­a­tors who won­der what will hap­pen if their sup­plier, for ex­am­ple, de­cides not to join the new sys­tem.

“You would have to shut your doors un­til your sup­plier can come on­line,” in­dus­try con­sul­tant Jackie Mcgowan said, call­ing that prospect po­ten­tially “dis­as­trous” for the young in­dus­try.

Ajax ap­peared to ease con­cerns that the state would move quickly on en­force­ment against op­er­a­tions with­out li­censes.

If the state is aware a busi­ness has ap­plied for a li­cense, “I don’t want you to have anx­i­ety that we’re out there and we’re go­ing to be en­forc­ing ev­ery­thing right away,” Ajax said.

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.

In ad­di­tion, 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 be ex­tended, if nec­es­sary.

By le­gal­iz­ing recre­ational pot, Cal­i­for­nia is at­tempt­ing to trans­form its vast mar­i­juana black mar­ket into the na­tion’s big­gest le­gal pot econ­omy, val­ued at $7 bil­lion.

Ajax also heard con­cerns about the pos­si­bil­ity that cot­tage-in­dus­try grow­ers could be over­run by huge oper­a­tors, backed by Wall Street dol­lars.

“Cap­i­tal­ism is messed up at best,” said Justin Calvino, who sits on the board of the Cal­i­for­nia Grow­ers As­so­ci­a­tion, an in­dus­try group.

He warned that smaller grow­ers strug­gling to sur­vive could be shut­tered “when you have li­censes be­ing is­sued to peo­ple with the most money, or to peo­ple that have the most lob­by­ists or the best mar­ket­ing.”

Ajax got a round of ap­plause when she said her agency would be open on Jan. 1 to be­gin is­su­ing li­censes.

“We are prob­a­bly go­ing to do reg­u­lar busi­ness hours,” she said. “Even though it’s a hol­i­day we are com­ing in and we are go­ing to get it done be­cause it’s im­por­tant to all of us that we are suc­cess­ful in this.”

AP PHOTO BY DAMIAN DOVARGANES

Mar­i­juana plants are dis­played at the Green Goat Fam­ily Farms stand at “The State of Cannabis,” a Cal­i­for­nia in­dus­try group meet­ing in Long Beach on Thurs­day.

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