Legal pot is ready for its debut
Fifty shops statewide are licensed to sell marijuana for recreational use beginning today.
SACRAMENTO — Will Senn has been waiting his whole life for this. Californians can now buy marijuana in stores, and his shop is opening its doors at 7 a.m. New Year’s Day.
Senn’s Urbn Leaf in San Diego was among the first to get a state-issued license to sell pot for medical and recreational uses. He hired 15 more workers to accommodate what he expects to be a crush of new customers at his shop, which had specialized in cannabis for medicinal purposes.
“This is what a lot of activists in the industry have been working for since the 1990s when Dennis Peron opened his first marijuana shop for AIDS patients in San Francisco,” said Senn, 32. “It’s a monumental moment, and we are ecstatic to be a part of it.”
The KindPeoples Collective in Santa Cruz plans to give out T-shirts to the first 420 people who show up to buy weed Monday.
Chief Executive Khalil Moutawakkil, 33, said the legalization of marijuana for recreational use is a major change that has been too long in coming.
“This is essentially going to eliminate prohibition on the plant of the last 400 years and return the plant back to the people,” he said.
Still, don’t expect pot shops on every corner. In recent weeks, hundreds of businesses have applied for temporary licenses to engage in the marijuana business, but industry officials expect a slow rollout as most cities in California have not yet given their approval, a prerequisite to getting a state license. As of Friday, 50 licenses had been issued by the state for businesses to sell recreational pot.
Sales for recreational use of pot are allowed in cities including Los Angeles, West Hollywood, San Francisco, San Diego, Oakland, Santa
Cruz and San Jose, but many proposed pot shops in those cities will not have a state license by the start of the year.
The state has not yet issued a retail permit for a store in Los Angeles, which plans to issue local licenses in the coming weeks.
At least 300 other cities, including Riverside, Fresno, Bakersfield, Pasadena and Anaheim, don’t allow pot sales for non-medical purposes, according to industry officials.
Voters paved the way for today in November 2016, with Proposition 64 earning 57% approval. The ballot measure made California one of eight states to approve the sale of cannabis for recreational use. Those 21 and older can purchase and possess up to an ounce of marijuana for recreational use and to grow up to six plants in their homes.
Even with greater access, there are still restrictions on where and when the drug can be used. State regulations prohibit smoking marijuana in many public places, including restaurants and theaters, where cigarettes are barred. And new laws make explicit you can’t toke and drive.
Customers visiting shops should be prepared to show proof of age and to pay in cash, merchants say. State officials are trying to craft a “green banking” plan to get around the cash-only problem.
A pre-election survey in 2016 found 25% of California voters had used marijuana for recreational purposes at some time in their life, but only 18% of those had done so in the last year. The USC Dornsife/Los Angeles Times poll found just 2% said they were much more likely to use it if Proposition 64 passed, 5% said they were somewhat more likely to use it, and 89% said they were no more likely to smoke pot if it were legalized.
Proposition 64 gave California officials more than a year to create a regulatory framework for regulating the cultivation, transport, testing and retail sale of cannabis for recreational use. The system that launched Monday is drawing criticism from the industry for its heavy taxes and perceived advantages granted to large corporate farms. It also provides the first state licenses for medical use. Local governments have previously regulated medical dispensaries that were authorized by Proposition 215 in 1996.
The state also has issued licenses for cultivating marijuana, with one of the first going to Cal Wave Enterprises for an indoor growing operation of up to 5,000 square feet in Santa Cruz. Cal Wave is the corporate entity that also runs the Kind Peoples Collective, which has been growing and selling marijuana for medical use with city approval since 2013.
The business has grown from nine employees and dozens of customers four years ago to 80 employees and 45,000 customers, said Moutawakkil, a Santa Cruz native.
“Our first priority is to cultivate for our customer base,” he said.
The temporary license was fairly easy to get because some requirements for background checks and security were waived. He expects a “more comprehensive” process for the annual license but says his business already meets the state standards.
The first license for the retail sale of recreational pot was issued to Torrey Holistics in San Diego. Tony Hall left a chemical distribution business two years ago to start the company with a friend and classmate at San Diego State.
“This is a once-in-a-multi-generational event,” he said, likening it to the end of prohibition of alcohol in 1933. He also obtained a new license to continue selling marijuana for medical uses.
Ecological Cannabis Organization, or ECO, which operates a store in Eureka, is another newly legal pot shop.
ECO plans to open its doors at 11 a.m. Monday and expects to see as much as a 50% jump in business now that it can sell recreational cannabis in addition to its previous medical pot sales, ECO President Jeff Poel said.
Poel, 58, entered the marijuana business after spending 25 years as an environmental scientist, most recently working for Humboldt County in policing pollution from pot farms. He has mixed feelings about the new era of legalized sales.
“I had better feelings about it until I saw the fees and taxes,” Poel said. That would be the 15% excise tax on retail sales, Humboldt County’s 8.5% sales tax (waived for medical card holders), the $1,000 application fee and taxes on growers — $9.25 per dry-weight ounce of cannabis flowers, and $2.75 per dry-weight ounce of cannabis leaves.
“We’re a small town and we’re in the middle of the Emerald Triangle, so there is a lot of black market availability up here,” Poel said. The Emerald Triangle is the area made up of Mendocino, Humboldt and Trinity counties in Northern California that has long produced most of the state’s marijuana.
“Unfortunately, what the state did is, they made the taxes and fees so ridiculously high that it’s going to drive the prices up 50% to 100%,” he said. “If you tax something too much it creates a black market, but we already have one.”
He predicted many growers will continue to supply the black market, where they can get more from their crop than in the heavily taxed legal market.
Beyond the business prospects, Poel reflected the excitement many in the industry feel over a change in state law despite the fact that marijuana remains designated as an illegal Schedule 1 drug under federal law. U.S. Atty. Gen. Jeff Sessions has made clear he opposes the sale of marijuana, but he has not overturned an Obama administration policy that has allowed sales for medical use to continue in states.
“I am happy because it’s time,” Poel said. “It’s a safe drug. It’s got a lot of health benefits. This is a big step, but the federal government has to figure out their deal and do what they’ve got to do to get it off Schedule 1.”
‘This is what a lot of activists in the industry have been working for since the 1990s .... It’s a monumental moment, and we are ecstatic to be a part of it.’ — Will Senn, San Diego pot shop owner