Recreational Legalization in California: How’s It Going?


Weed sales have been legal in California since January 1. People can buy recreational cannabis in places that used to provide marijuana just for patients, so business is booming. Lines are long and spirits are high.

Jobs are being created. Cannabis businesses are hiring. Billboards are chock-full of pot-themed ads. Lawyers and consultants and marketers and packaging suppliers and all kinds of folks are making money on the new green industry.

RELATED: The Future of Weed Sales in California

During a recent visit to A Therapeutic Alternative on H Street in midtown Sacramento, the joint was jumping. Store owner Kim Cargile (pictured above) told me that while she was happy to have the extra customers, the new regulations have made doing business twice as expensive than it used to be, though it’s still worthwhile.

However, simply put, the taxes are too damn high. After the excise tax, the state tax, the city tax and whatever other random fees that get added on, cannabis taxes are in the area of 25%-30%. Exorbitant taxes will not make the black market go away.

Berkeley is already considering lowering its cannabis tax. Other cities may follow suit.

Most cities don’t have recreational-pot stores yet. San Diego, Sacramento and the Bay Area are ahead of the curve, but Los Angeles has lagged behind in accepting applications. Places like Fresno, Bakersfield and most of the Central Valley will probably never allow recreational cannabis for adults.

Calaveras County, in the Sierra Nevada foothills southeast of Sacramento, started recruiting cannabis cultivators two years ago, but pulled a bait-and-switch in January, when it banned commercial cultivation completely. This move left farmers and investors on the hook for millions of dollars and will most likely spark several lawsuits.

RELATED: California Medical-Marijuana Pioneer Dennis Peron Passes Away

Hezekiah Allen, executive director of the California Growers Association, has filed a lawsuit challenging the removal of the one-acre cap on commercial farms. Prop 64 was designed and sold to small growers as a way to give the “mom and pop” small-scale cannabis operators a head start before giant corporate farms tried to corner the market. Removing this cap makes it harder for outlaws to go legit.

People are getting out of jail and having their criminal records expunged. Prop 64 allows anyone with a cannabis conviction to petition the court to have the record changed if the past infraction is no longer a crime or if the “crime” is now a misdemeanor instead of a felony. Some cities, such as San Francisco and San Diego, are searching their databases in an effort to provide relief to the thousands of people that have been unfairly punished by the Drug War. Other cities (ahem, Los Angeles), not so much.

That people can petition the courts to have charges and convictions removed from their records is probably the best thing about California’s cannabis legalization so far.



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Recreational marijuana wars: Nevada vs. California


Noah Berger / AP

In this Jan. 6, 2018, photo, an employee stocks cannabis at a store shortly before its first day of recreational marijuana sales in San Francisco.

Nevada’s neighbor to the west became the sixth U.S. state to kick off recreational marijuana sales on Jan. 1, just six months after the Silver State started sales last July.

Almost 100 dispensaries across San Diego, San Jose, Oakland and Berkeley are among California stores licensed to sell recreational marijuana. A study from the University of California, Davis, estimates the state’s industry, once fully operating, could be worth as much as $5 billion annually by 2020.

But higher total cannabis taxes, lesser legal availability per capita and lower testing standards could keep the black market healthy and prevent California’s industry from expanding, according to a Berkeley-based pot expert.

Chris Conrad, a court-qualified expert witness and professor at cannabis-focused Oaksterdam University, said California could be “years away” from reaching its pot-selling potential.

“The tax structure is currently set up in a way that will preserve the black market,” Conrad said. “Illegal vendors probably won’t be able to operate on the same scale that they have been, though.”

That’s a contrast to Nevada, where pot taxes reach up to 38 percent in the most heavily taxed municipalities, like Henderson and Las Vegas. Through four months of legal sales from July through October, the industry earned almost $127 million in sales and $19 million in tax revenue, according to data from the Nevada Dispensary Association. Is it possible for California’s cannabis industry to cut into Nevada’s? Here’s a look at how the two industries compare.

Will California’s industry affect Nevada’s?

Although California’s expanding marijuana industry is on pace to become significantly larger than Nevada’s market, Las Vegas business owners believe a larger pool of new customers curious to try the legal plant would outweigh the setbacks of losing California customers who may previously have traveled to Nevada.

Both Andrew Jolley of The Source and owner Armen Yemenidjian of Essence Cannabis Dispensary said at least 10-15 percent of their combined medical and recreational marijuana customers hail from California. About 27 percent of Las Vegas’ 42.9 million annual tourists are from Southern California, according to the Las Vegas Convention and Visitors Authority.

Are marijuana lounges on the horizon?

To set Las Vegas apart from other major U.S. cities that allow recreational marijuana, Nevada State Sen. Tick Segerblom said Las Vegas’ goal is to model its industry after Amsterdam, with lounges where people can use the plant in a controlled public space.

“We’ve learned from gambling that even while more states have allowed gambling, it hasn’t come back to hurt Nevada,” Seger-blom said. “We just want to make sure we’re always the gold standard for marijuana, and it’s always the best place to come use and enjoy the plant.”

Only Denver has made a serious push toward marijuana lounges in the past. Those efforts were held up by ambiguities in Colorado state law as well as dissent from local elected officials.

While the Las Vegas City Council and Clark County Commission discussed implementing marijuana lounges as early as spring, those plans were halted following a Jan. 4 memo from U.S. Attorney General Jeff Sessions that effectively rolled back Obama-era protections for weed-legal states.

“The memo caught a lot of people off guard, that’s the tough part,” said Bryan Scott, assistant city attorney for Las Vegas. “There are a lot of prominent citizens involved in this industry and it would be good to have some certainty.”

Both Scott and Clark County Commission Chairman Steve Sisolak said they plan to continue pursuing options for marijuana lounges after getting clarity from legal council.

Legal comparison

Purchase and Possession Limit

Us: 1 ounce of flower; 1/8 ounce of the THC equivalent of concentrates and edibles

Them: 1 ounce of flower; about 2/7 ounce (8 grams) of the THC equivalent of concentrates and edibles

State Recreational Marijuana Tax

Us: 10 percent

Them: 15 percent

Sales and Use Tax

Us: 8.25 percent plus a wholesale distribution tax of 15 percent

Them: 9.5 percent. Cultivators also pay $9.25 per ounce of marijuana flower sold and $2.25 per ounce of marijuana leaf sold

City Sales Tax

Us: Can vary from 2-4 percent

Them: Can vary from 3-17 percent

Personal marijuana plant limit

Us: 6 plants per person; 12 plants per household

Them: 6 plants per person

Price comparison

Marijuana-infused chocolate bar, 100mg THC, 12 pieces

• The Source (Las Vegas): $36

• Essence (Las Vegas): $33

• Inyo (Las Vegas): $36

• Balboa Avenue Cooperative (San Diego): $30

• Mankind Cooperative (San Diego): $24

• The Healing Center (San Diego): $29

Strawberry Cough Syringe (or similar), 500 mg, Concentrate

• The Source (Las Vegas): $44

• Essence (Las Vegas): $41

• Inyo (Las Vegas): $35

• Balboa Avenue Cooperative (San Diego): $41

• Mankind Cooperative (San Diego): $35

• The Healing Center (San Diego): $38

Blue Dream (or comparable flower), 1/8th ounce

• The Source (Las Vegas): $50

• Essence (Las Vegas): $48

• Inyo (Las Vegas): $55

• Balboa Avenue Cooperative (San Diego): $50

• Mankind Cooperative (San Diego): $40

• The Healing Center (San Diego): $47

Rove Haze Vape Cartridge (or similar), 1 gram

• The Source (Las Vegas): $116

• Essence (Las Vegas): $132

• Inyo (Las Vegas): $128

• Balboa Avenue Cooperative (San Diego):$106

• Mankind Cooperative (San Diego): $100

• The Healing Center (San Diego): $98

Editor’s note: Brian Greenspun, the CEO, publisher and editor of Greenspun Media Group, the parent company of Las Vegas Weekly, has an ownership interest in Essence Cannabis Dispensary.

This story originally appeared in the Las Vegas Weekly.



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