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Legalized Marijuana in California
In 2016, California voters approved Proposition 64, which was a ballot measure to legalize weed for recreational use. Adult use is already legal in Colorado, Oregon, Alaska, Washington, Nevada, Maine, and Massachusetts, and all are generating massive tax revenues. Almost immediately, California’s weed industry is set to become the nation’s largest and most profitable.
The first two states to legalize recreational use, being Washington and Colorado, are now raking in well over $1 billion in yearly sales. Last year, medical cannabis sales generated roughly $2 million in California, and experts estimate that the illegal market accounts for another $5.7 billion, which equates to about three-quarters of all pot sales occurring within the state.
Projections for both medical cannabis and black market sales are that they will drop significantly when recreational sales start next year, the deadline for which is January 1, 2018. Experts predict a 70 percent drop in medical sales, while illegal sales will likely plummet by more than half. The black market will not disappear, however.
Old habits rarely die quickly. Consumers may still turn to the black market for cheap weed or regulatory confusion. Researchers are estimating that roughly 30 percent of all sales in the state will still occur outside of the legal system by the end of the first year of recreational sales. State cannabis regulator, Lori Ajax, spoke to The Hill in January about how her agency is working to kill the black market:
“We want them to get into the regulated market. That is why we are doing it. The last thing we want to do, as we are trying to get people to come into the regulated market, is to make it so confusing that they are not sure what they can do under medical and recreational systems.” Her agency, the Bureau of Marijuana Control, is trying to harmonize both medical and recreational markets.
Ajax also said that the Bureau of Marijuana Control would start issuing licenses for recreational sales by the start of next year. Kevin Sabet, president of Smart Approaches to Marijuana, a group opposed to legalizing weed, showed concern that the new legal industry would be insufficiently able to undercut black market sales:
“No proposal will get rid of the underground market for marijuana in California, even if the campaign promises said they would. We have seen this in other states too, that the well-established underground market easily undercuts the legal market. This is unsurprising, and it is just one more unrealized promise from the marijuana industry.”
