California Cannabis Expansion

Following a sweep of victories in the 2020 elections, the cannabis industry in California is about to add multiple new cannabis businesses. The majority of the 35 reported cities/counties voted in favor of cannabis measures on the ballot, issuing in a wave of California cannabis expansion in 2021.

Although a majority of the approved ballot measures are for cannabis-related taxes, this is oftentimes an indicator that additional cannabis regulations are coming in the future. In all likelihood, the next few years will see the rapid expansion of cannabis markets across the state.

Increasing Access to Cannabis

Aside from approving cannabis-related tax measures, the voters also paved the way for the opening of a multitude of new cannabis businesses in California. Many of these businesses will soon be opening in areas where access to legal cannabis was previously scarce.

The town of Encinitas, which previously banned all cannabis businesses, voted to approve the retail, cultivation, and manufacturing of cannabis. In Pomona, voters approved a measure that would allow the issuance of up to eight new cannabis business permits. In Ventura, voters passed an ordinance allowing cannabis cultivation, processing, distribution, and sale within the unincorporated areas of the county.

Voters in the aptly named town of Weed, CA voted to establish cannabis business regulations and licensing is expected to follow. In Banning, where distribution was previously prohibited, the voters approved cannabis distribution within the city. In Benicia and Laguna Woods, voters approved non-binding advisory opinions that the cities should allow new retail cannabis businesses.

California Cannabis Consolidation

New markets may not be the only change coming to the California cannabis industry in 2021. This year may also see the consolidation of the main three agencies that oversee cannabis regulation. While the Bureau of Cannabis Control currently oversees most cannabis businesses, the Department of Food and Agriculture has jurisdiction over cultivation, and the Department of Public Health oversees cannabis manufacturing.

The new agency, which would be called the Department of Cannabis Control, has been proposed in the recent budget by the Governor of California. If passed by the Legislature, the agency would be created on July 1, 2021. This would likely be a welcome relief to vertically-integrated cannabis businesses which currently must work with all three agencies to become operational and remain compliant.

Many hope that the merger of these agencies will simplify the licensing process and clarify differing regulation interpretations provided by the agencies. The union of these agencies may also lead to a strengthening of cannabis regulations and enforcement in the state which could help to push out some of the illicit sellers and growers.

The Future of California Cannabis

Only about 89 of 482 California cities currently allow retail cannabis businesses. This not only severely limits people’s access to recreational and medicinal cannabis, but also increases the popularity of black market cannabis.

Illicit cannabis outsold legal cannabis in 2019 by an estimated $5 billion. As access to cannabis increases, the legal cannabis market in California will grow and is expected to surpass illicit sales by 2024. It is estimated that California will generate as much as $8 billion in recreational cannabis and $240 million in medicinal cannabis sales by 2024.

As the legal cannabis industry in California continues to grow, it is likely licensing could become more competitive as more people apply. Since licenses are capped and regulators are consolidating, it will be even more important for those looking to open a cannabis business to use experienced application writers and consultants. Although it might be changing, the future of the cannabis industry in California looks promising.

How Can Sapphire Risk Help?

Tony Gallo and the team of application writers and consultants at Sapphire Risk Advisory Group have over 30 years of security experience and expertise. Sapphire has worked with over 60 successful cannabis businesses in California and is prepared to work in new cities and counties in the state. Follow us on social media to stay up to date with California cannabis industry updates!