New Rules for Prop 64 Finally Released
California just released the new cannabis rules
And it looks like the dream of having weed delivered by drone or self-driving car is not in our future. At least according to the new rules released by the three licensing agencies that regulate cannabis in California. It took a while but the Department of Health, Department of Food and Agriculture along with the Bureau of Cannabis Control finally came to a consensus about how the state plans to regulate.
The new guidelines are good news but it may be too little too late. Many cities have operated in a state of confusion and panic as the January 1 deadline approaches without word on how to proceed from the state. The confusion has resulted in wildly different responses from different cities and municipalities.
Palm Springs has taken steps to embrace cannabis as any other business while San Francisco delayed voting on city ordinances which may make it impossible for retailers to be ready day one. And that can add up to millions of dollars in an industry expected to produce $7 billion in sales alone.
There are some clear winners
The new rules outlined a way for delivery services to finally obtain licenses and step out of the shadows. The first applications should be fined early next month which is a breath of fresh OG for the elderly and disabled. But there are some limitations on how companies can transport it.
There won't be any drones, autonomous vehicles, aircraft, watercraft, rail or human powered vehicle delivery options. Only good old cars and trucks can deliver according to the current version. While less than ideal, the vehicle stipulation was a hard-fought compromise.
Big farms got some of the best news because the new rules didn't include size restrictions for canopies or nurseries. This means that small cultivators will have an increasingly difficult time staying in front of regulations while large farms rake in massive profits. And despite fires ravaging much of the best weed country, there is a chance for there to be an overabundance of product which would dive bomb prices and damage the market.
And some losers
Like other states that have legalized recreational (read unlicensed) sales, California is placing some restrictions on potency, form and packaging. Edibles can only have 100 milligrams of THC in ten serving packages or about 10 milligrams per serving. This makes them more of a novelty than anything else given the amount of sugar in most infused confections.
Lotions and tinctures are allowed to have 2000 milligrams for medical patients but rec users will only get 1000 milligrams of THC per bottle. The new rules make many popular but potent edible products illegal. And they require businesses with established customers to change recipes to comply with the new limits.
Companies with limited capital or products that fall into the "candy" market are on the way out. Basically anything that can be construed as targeting children is banned. That includes everything from cartoons to human, animal, fruit or insect shapes. They also prohibit mixing THC with alcohol, nicotine, caffeine or seafood.
But it's not all bad
Although the floodgates for massive farms are open thanks to having no size limit, measures are in place to limit the impact. The state implemented a sliding-scale fee system where larger players pay higher prices for licensing. Companies making more than $80 million in gross revenue for example will pay up to $125,000 a year for a license instead of a couple thousand.
Despite the potential profit, many California municipalities are lagging behind regulatory deadlines. So regulators have offered a four-month grace period for producers to get their permits in order. During that time, currently licensed farms and nurseries can sell to any licensed dispensary.
The move is intended to help jump-start the recreational market. And given the reluctance of municipalities to move ahead on regulations, it might not be enough to prevent late openings across the state. It remains to be seen whether or not cities like San Francisco and Palm Springs can get everything together before the deadline.
California is a agricultural behemoth with the ability to produce anything and everything we could want. Even with rampaging fires, record-breaking droughts and reluctant politicians, California will still make more money on the first day than any other state possibly could. It just sucks that they won't be able to leverage their abundant supply of drones and other vehicles for delivery.
Do you think San Francisco dispensaries will be ready January 1? Are you bummed that you won't get weed delivered by jet ski? Do you think mom-and-pop cultivators are going to be muscled out? Let us know your thoughts in the comment section below.