Last November, the industry took a huge leap forward when seven states embraced sweeping cannabis reform; and ever since then my inbox has been inundated with one simple question: What happens now?
The answer is just as simple: Regulation.
Ah yes, regulation. It might not be the sexiest term in the English language, but it’s the only thing protecting the legal cannabis industry from pesky federal interference. Legalization is only half the battle; and for people in states like California, Florida, and Nevada, they’re starting to learn this lesson first hand.
To help keep you in the regulatory know, here’s a quick update on what’s been going on in some of the biggest (soon-to-be) cannabis states.
Let’s get straight to the elephant in the room: California. In 1996, California became the first official medical marijuana state, and ever since then marijuana has been big business. From April 2015 to March 2016, California’s medical marijuana market generated $845 million in sales.
Couple this with the fact that California has the 6th highest GDP in the world, and you can start to get a picture of how massive the state’s recreational market is going to be once its regulated; if they do it right, that is. Here’s what you should keep your eye on:
On April 4, Gov. Jerry Brown released a 92-page document on how to regulate and harmonize the recreational market with the medicinal one. Throughout the document, Gov. Brown weighs in on many of the conflicting mandates between Proposition 64 and the state’s existing medical marijuana laws.
One of the more controversial proposals is Brown’s recommendation to allow cannabis businesses to become vertically integrated. That means a single cannabis business, recreational or medicinal, could be licensed to grow, process, distribute, and sell cannabis.
Some fear that it will allow for bigger cannabis companies to consolidate the market, while others argue that it will help ensure a robust and healthy market.
It’s going to be important to watch how it’s received, because even if they legislature does not fully adopt Gov. Brown’s recommendations, it will still serve to set the tone on how that state moves forward with regulating its recreational cannabis industry.
One state that’s set to rival California in terms of cannabis sales is the state of Florida. Although it’s medical marijuana market is not yet set up, early projections already have sales exceeding $1 billion by 2020; but there’s a problem.
At the moment there are two competing measures, one in the state Senate and one in the House, to regulate Florida’s medical cannabis industry, and neither one of them are perfect.
The measure proposed in the Senate would greatly expand upon the number upon the number of medical cannabis providers in the state, but it would also ban the smoking of medical marijuana.
The House measure would also increase the number of medical marijuana providers, but at a slower rate. Even worse, the House measure would ban patients from smoking, vaping, or using edible marijuana products; leaving the ingestion of marijuana oil as the only legal form of consumption.
As it stands now there’s a lot of energy behind the Senate bill, which is good for the industry, but if anyone can screw something up, it’s the Florida legislature.
The success or failure of Florida’s medical marijuana market will depend largely on which of the two competing measures passes; making the next few months a critical time for the future of Florida cannabis. Stay hopeful, but don’t be surprised if the regulatory winds blow the other way.
Although all eyes are on California as they regulate their recreational market, an equally big market that just opened up is Nevada. Home to the sin city known as Las Vegas, the recreational market will no doubt receive a huge boost from the state’s prodigious tourism industry.
According to a recent report, sales from Nevada’s recreational marijuana market are expected to grow to $630 million by 2020; representing “an unprecedented socio-economic impact in a state already shaped and fueled by tourism and entertainment.”
Currently, recreational sales are slated to start on January 1, 2018. But there are efforts underway within the state legislature to kick start recreational sales early by allowing medical marijuana dispensaries to temporarily sell recreational marijuana.
The Department of Taxation, which is responsible for regulating Nevada’s recreational cannabis market, is also considering a similar proposal. If either are approved, recreational sales could start as early as July 1, 2017.
There’s a lot of momentum going in the direction of early sales, especially since lawmakers saw the success that Oregon had with its early sales program, so don’t be surprised if Nevada takes the plunge a little bit early.