California Pot Industry Struggles Amidst New Regulations, Illicit Competition

California’s legal weed growing pains are starting to sting. With a constant push-and-pull of compliance and competition, ganjapreneurs up and down the coast are left looking for a light at the end of the tunnel. She added that most of the state’s licensed pot businesses are “Breaking even, but I don’t think they might be hitting their budget.”

” eyes are more wide open as to what the actual industry is doing, as opposed to the green rush,” Miles said.

When adult-use sales began in January of 2018, permitted businesses across the state were well aware that their licenses were temporary, and that final regulations and rules would be implemented after six months.

At California’s 31 licensed testing laboratories, technicians have been inundated with thousands of samples from the state’s 3,105 temporary cultivation and 599 temporary manufacturing licensees, leading desperate operators waiting in the winds while lab employees analyze flower, edibles, distillate, and more for potency, pesticides, terpene profiles, and mold. “They’re calling me every ten minutes saying, ‘Where’s my sample? Where’s my sample?'”

But even once those test results are returned, there’s no guarantee that the samples will pass the state’s newly implemented standards. For the first six months of recreational sales, California dispensaries were allowed to sell untested product left over from the state’s loosely regulated medical market. Now, with high prices and skill needed to produce clean product, growers and manufacturers are being rebuffed from the industry before they can even begin to worry about packaging. At ICAL, Swider estimates that up to 50% of Southern California’s flower and 90% of its distillates, the refined oil used in vape cartridges, will not pass state pesticide regulations.

On the other end of the spectrum, there are some forward-thinking companies that sacrificed early industry profits for long-term goals, opting to produce compliant product and packaging from the jump, no matter the inflated cost. For those companies, business is booming, with many of their competitors falling off of shelves at licensed dispensaries over the past month. “

With only six months of business under its belt, California’s legal weed complications are bringing up questions about the viability of small businesses in the local marketplace, how long the black market will thrive, and more. Despite those worries, the industry is still in its infant stages, and insiders are still confident that the Golden State green rush will emerge triumphant after its freshman slump.

“It’s kind of the good, the bad, and the ugly at this point. “It’s going to be rough, and there are folks that don’t end up making it through, but I am oddly optimistic.

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