Prohibitionists are Planting Pitfalls for California Cannabis Delivery & Distribution Companies
Today is the final day that Californian cannabis activists and advocates may submit comments and/or suggestions to the state’s Bureau of Cannabis Control (BCC) in response to the final updated set of proposed regulations that will lay down the law on legal weed in the state.
Voters in the Golden State passed Prop 64 in 2016, but even today the law has not been finalized as the 5th largest economy on the planet struggles to wrap its head around its potential multibillion dollar marijuana market.
For this entire year, the BCC has been working to outline a workable set of rules and regulations that will govern every aspect of the cannabis industry – from seed to sale.
As you can imagine, such a document is incredibly verbose, and mostly boring as hell, but within the text lies all the answers to the questions racing through the minds of everyone who hopes to be a part of this incredibly lucrative business.
There are many proposed regulation changes and updates, but for this article we are going to hone in on one aspect of these new rules that could have a major impact on a wide array of supply-side operators as well as end-user cannabis consumers.
In July, the BCC released a preliminary set of proposed regulations…a precursor of sorts for their latest rendition being considered currently. In that July release, one of the most head turning developments was in § 5414. Non-Storefront Retailer
In another word, Deliveries.
In that section of proposed regulations – which still stands as written in the latest update – it is mandated that legal and licensed cannabis delivery services will be allowed to deliver to any municipality, even if that municipality itself has a local ban on retail cannabis dispensaries.
This was, and still is, a huge deal. Many people outside of California picture us swimming in OG Kush, but the reality is that the vast majority of Californians reside in what have become known as “Pot Deserts”.
No, not pot desserts like Lil Debbie snacks… pot deserts, named as such because consumers have to travel long distances to find an oasis of legal weed for sale.
This backdoor prohibition is the work of often Conservative anti-cannabis city councils and local officials who have decided to ignore the will of their constituents who voted for access to legal weed two years ago. Through the power given to them by the flawed language in Prop 64, these weed hating local lawmakers are able to flex just hard enough to enact bans on local dispensaries.
That’s one reason why this updated language from the BCC is so compelling.
Now, many thought, it doesn’t matter what those small town officials think about cannabis, they will have to back down and accept the fact that consumers within their jurisdiction have the right to legal deliveries.
Since it appears that the language that will make it into the final law in California will include this provision for legal, licensed delivery services, the prohibitionists are hitting back the only way they have left.
Reports out of cities from San Diego to the Bay are coming in that certain municipalities that are known for being anti-cannabis are using some shady tactics to walk the line between satisfying the new weed laws while punishing those who would actually benefit from them.
In San Diego, for example, an unnamed source reports that his licensed distribution company just received a tax bill from the city based on the massive amounts of cannabis and products that the distro company facilitated to local legal, licensed SD dispensaries.
This came as a complete surprise to the business owner, who figured that his own business taxes covered his obligation, while sales taxes would be left to the retailer. Apparently, the city of San Diego disagrees. They want a piece from the distributor and then again, on the same exact product, from the retailers.
Is that double taxation?
Sort of… but whatever it is, it happens all the time in a regulated economy.
As a result, the company will be forced to raise its prices for customers in the San Diego marketplace. That raise will undoubtedly be passed on to the consumers who are already being taxed and charged premium rates for legal weed. Everyone loses. Even, in the long run, the city of San Diego.
Another example further north sees a specific municipality with their own ban on retail cannabis already fighting legal delivery services by creating insanely expensive and/or hard-to-obtain permits for any legal delivery service who wants to operate within their jurisdiction.
By doing this, they can appeal to the BCC by saying, “See, we are giving them an option.”
Even if the option sucks.
Yet another county even further north is allowing cannabis deliveries, but has outlawed cash transactions on those deliveries.
This is THE bottleneck in the legal California cannabis market right now.
There is no shortage of weed. There is no shortage of weed smokers.
Prop 64 and the BCC give way too much power to local authorities who do not know the first thing about cannabis, and are more often than not totally outclassed by cannabis advocates when it comes to reading and interpreting these new regulations.
Hopefully, one of the positive changes that makes it through to the final draft of the new law will not only keep this protective language for legal, licensed deliveries, but will build upon it to somehow discourage or defang attempts at de-facto bans like in the examples above.
This is grossly unjust.
Comments are pouring in to BCC headquarters today as the deadline to do so ticks away.
Sometime around mid-January 2019 we will be given the finalized version of the law and we will see if the Cali cannabis market truly turns into a corporate cash grab.