California rolls out legal- pot rules
LOS ANGELES — California released long- awaited rules Thursday that will govern the state’s emerging legal marijuana industry, while potentially opening the way for larger- scale cultivation that some fear could strangle small- plot farmers.
The list of emergency regulations will allow the state to begin issuing temporary licenses for growers, distributors and sellers on Jan. 1, when recreational sales become legal.
They provide a regulatory road map for business operations, from fields to the retail sales counter, establishing guidelines for testing, growing and the distribution of marijuana in what is projected to be a $ 7 billion economy, the nation’s largest.
The regulations have been in development for many months and in some cases covered familiar ground: At first, the state will issue only temporary licenses to growers and retailers, provided they have a local permit to open for business.
Other changes appeared significant.
Preliminary information from the state indicated a maximum 1- acre cap would be set on most cultivators. But the regulations issued Thursday did not include that language, instead placing limits on only certain growers’ licenses.
Hezekiah Allen, executive director of the California Growers Association, an industry group, said the rules appeared to allow large businesses to obtain “as many licenses as they could afford,” opening the way for vast grows that could threaten the success of smaller cannabis farmers.
The state “could have just opened the door for wellcapitalized interests … to really jeopardize the success of the marketplace,” he said.
With the state already saturated with marijuana, it could “make an oversupply problem into an oversupply crisis,” he added.
According to the regulations, annual fees for cultivation licenses could be nearly $ 80,000, or as little as $ 1,200, based on production.
Voters last year legalized the recreational use of marijuana beginning in 2018, a move that will unite that new market with the state’s long- running medical- marijuana industry. Within several years, the state expects to collect up to $ 1 billion in new taxes.
The rules were issued just 45 days before legal sales can kick off, and at a time of widespread confusion and anxiety for many in the industry.
Some predict high taxes — in some places, as high as 45 percent — will drive consumers to the black market. Most banks won’t do business with cannabis companies. And Los Angeles and San Francisco are among many cities without local rules in place.