- Title: 'Weed Apocalypse' dawns for California pot dealers on July 1
- Date: 29th June 2018
- Summary: OAKLAND, CALIFORNIA, UNITED STATES (FILE - APRIL 19, 2018) (REUTERS) VARIOUS OF LAB TECHNICIAN TESTING MARIJUANA
- Embargoed: 14th July 2018 00:45
- Keywords: edibles CBD sale restrictions cannabis July 1 smoking weed compliance Marijuana
- Location: LOS ANGELES / OAKLAND, CALIFORNIA, UNITED STATES;
- City: LOS ANGELES / OAKLAND, CALIFORNIA, UNITED STATES;
- Country: USA
- Topics: Living / Lifestyle,Society/Social Issues
- Reuters ID: LVA0028MD52E1
- Aspect Ratio: 16:9
- Story Text: Six months after California made recreational marijuana use legal, the so-called "Weed Apocalypse" arrives this weekend, as tight state regulations going into effect on Sunday (July 1) have dispensaries scrambling to unload non-compliant product.
But while the deadline is giving pot shop owners headaches, it is creating an opportunity for consumers. They are already anticipating deep discounts on their favorite marijuana products on what has been dubbed "Green Saturday" - for the color of cannabis - and for black market dealers.
Jerred Kiloh, who owns 'The Higher Path' dispensary in Sherman Oaks, is one vendor having to get rid of all his non-compliant stock before Sunday. He said "You're seeing anything from between 50 and 70 percent off which, as a business, I'm losing anywhere between 30 and 40 percent on every sale just so I don't lose 100 percent because under current laws I can't give product that is non-compliant back to distributors or back to vendors who gave it to us because once we've become in possession of the product, we can't give it back."
Kiloh, who is also the president of the UCBA (United Cannabis Business Association), estimates that the licensed cannabis industry as a whole in California would have lost up to half a billion dollars come July 1.
The compliance regulations issued by the Bureau of Cannabis Control are a result of the legalization of recreational marijuana that came in on January 1. After January 1, the bureau issued guidelines that must be complied to by vendors and distributors.
Jamie Warm is the CEO of Henry's Original, a Californian grower and distributor. He explained "You need to be phase two compliant which means you're testing for pesticides, you're testing for potency and you're testing for microbiological contaminants, specifically ecoli, salmonella and aspergillus. Once you have those July 1 testing standards, that goes on your product. There's a harvest date and best use by date and once those are on your products and you're in CRP (Child Resistant Packaging) packaging and you have all the governmental labels necessary, then you can take your product to market."
Henry's Original is one of a few growers and distributors to be ready for July 1. Many others have been hampered because of a dearth of testing facilities in California, which means only a portion of the industry is July 1 ready.
"When you usually come into a dispensary, it's normally like a candy shop where there are so many choices," said Kiloh, adding "Now you're walking in and you're seeing 20 or 30 brands on the shelf where you used to see hundreds and I think that the big problem is they become accustomed to variety and if the only place they can get variety now is the black market, well then that's where the consumer is going to go. They're going to go where they are accustomed to the variety that they're used to."
Legal vendors are already concerned that high taxes on products - sometimes up to 40% - are pushing consumers to unlicensed dispensaries. It's estimated that in Los Angeles alone there are 1,300 unlicensed establishments.
The cost of being compliant is also pushing up prices, meaning the black market is thriving. Brad Slaughter, a writer for California Weed Blog who has been covering the developments of the industry during the six month time period, said "There are a lot of people saying that within the next year or two you're going to see at least 90 percent of these companies out of business because how are they going to sustain themselves unless they go into the underground market? And really it's not them trying to be criminal. They don't want to go into the underground market, they want to comply, they want to work with the bureau."
Aside from there not being a crackdown on the black market, another issue for the industry is that the public aren't aware about which dispensaries are legal or not.
"They're uninformed," said Kiloh. "You'd think some of the tax dollars would have gone into informing the public about how to find the regulated market so they can get and receive the tax dollars that are going to really necessary for this industry to thrive and for the government to be allowed enough money to be put into enforcement." - Copyright Holder: FILE REUTERS (CAN SELL)
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