Retail marijuana is spreading to California, Massachusetts and Maine

One of the biggest issues in America at the moment is marijuana legalization. Next year, three states (California, Massachusetts and Maine) are set to legalize recreational marijuana. California is the biggest of these three with an industry that dwarfs all others in size and scope, and legalization comes into force there on the 2nd of January. This means that on this date retail stores will be open in the region and guests will finally be able to purchase their long-awaited marijuana joints in the setting of their choosing. Maine and Massachusetts will follow during the summer and it will be exciting to see how all of these states fare in 2018 with regard to recreational marijuana.

Marijuana Hurdles in California

All eyes are on California at present and there is a massive rush on to get everything into place by the deadline. It is by no means easy sailing the waters of marijuana implementation. Though it has been done in states such as Colorado and others, it is on a much grander scale in California. The marijuana industry is far larger and the scope of legislation is much greater, with Colorado taking a lax and light touch (and, it must be said, highly successful) approach to marijuana legalization. California has also been thrown into a marijuana frenzy. Tens of thousands of eager business people are standing in line to make tremendous profits off the business and there is a huge issue of oversupply, with some analysts suggesting that there is currently more than 12 times as much supply as demand at current figures. A lot of startups are going to get toasted as they are not going to be able to comply with all the regulations that come into place, especially with regard to the actual growers instead of the distributors. According to Zack Lazarus, CEO of Green Alternative:

“We are in the process of stockpiling cannabis in order to fulfill the market needs…We believe there will be a huge rush. We go through two to four pounds [per day] on average, and we anticipate going through three to four times as much when we open the doors for recreational.”

Time will tell if this is a sensible or a foolish approach. Aside from stockpiling pot and oversupply there are many regulatory and side issues to be complied with. Many growers are going to have a difficult time comply with the stricter growing and marketing regulations that come with recreational marijuana.

So California is going to set the scene, it could either be a thundering success, an epic failure, and any section in between these two extremes. It is important to note that the price of marijuana in Colorado recently took a huge decline of 40% over the last year. Colorado was the first state to legalize recreational marijuana in 2014, with Washington, Oregon, Alaska and Nevada recently seeing legalization. This decline could well be seen as an indicator, as supply goes up and demand goes down, Colorado having a well-established marijuana industry. There are many variables, but California could well see a huge crash in the price of weed, given how much is being produced at the present time and the fact that people are able to grow their own. Many marijuana companies are going into the industry basing their projections on current weed prices. A 20% drop or more could mean that many companies will be into the red.

Massachusetts and Maine

Massachusetts will implement retail marijuana sales on July 1, once state officials finalize whether certain localities will be able to maintain a marijuana ban in their respective towns. The Cannabis Control Commission in Boston held its first meeting on September12 on developing and implementing regulations, and a spokesperson indicated that they are committed to making the deadline. Maine would have the smallest market, and it’s unclear when they’ll get it off the ground. Dan Tartakoff, clerk for the Marijuana Legalization Implementation Committee of state lawmakers, indicated that draft regulations werereleased in September proposing a 20% tax rate.

Both of these states have medical marijuana programs in place. It remains to be seen how the recreational market develops, as there is little available data and no real model to base a recreational marijuana market on. In any case, projections are just projections.

2018 Predictions

It is hard, or impossible, to say with clarity how the marijuana scene will develop in 2018. But without a doubt America will be far greener with marijuana much easier to access and smoke that it has been in years past. The stigma surrounding the plant will lessen and it will become just another popular pastime that is perhaps a good way healthier than alcohol and cigarettes. But it could well be a safe bet that many marijuana businesses, particularly in California, might get a shock. The marijuana industry, like all industries, is subject to booms and busts, and 2018 could see a bust in the prices of marijuana, despite wider acceptance by the populace.


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