Year 1 a mixed bag for businesses in California’s pot market

The choppy rollout of California’s legal market saddled the company with costly delays, but it was undone by an abrupt state rule change that allowed just about any marijuana business to become its own distributor, undercutting the need for stand-alone companies like Verdant.

In a nation increasingly embracing legal cannabis, California stands out as the country’s biggest pot shop.

At year’s end, California’s effort to transform its longstanding illegal and medicinal marijuana markets into a unified, multibillion-dollar industry remains a work in progress.

With many communities banning marijuana sales, limiting the number of licenses or simply not creating rules for the legal market to operate, the supply chain is fragile, leaving some shops with sparsely stocked shelves.

In Los Angeles, where the pace of licensing has lagged, Adam Spiker, who heads an industry group, summed up the condition of most companies with one word, “Pain”.

He says tax rates need to be cut to entice buyers into the legal market, and the city needs to rapidly expand the number of licenses for shops to sell cannabis.

That’s not the case for many retail businesses in Los Angeles.

Here, and elsewhere, the illicit market that thrived for decades continues to do robust business, often in plain sight.

Larger companies can weather the transition to the legal market – some say government rules favor them – but smaller operators are taking out second and third mortgages, industry experts say.

…

Article source: http://www.dailystar.com.lb/Business/International/2018/Dec-30/472955-year-1-a-mixed-bag-for-businesses-in-californias-pot-market.ashx