CALIFORNIA TO SELL $5+ BILLION IN REC WEED
Some of the numbers, Rec sales, and why Medical Card applications could go up.
"Contrary to the results of this study, the new California Marijuana laws could boost the number of medical marijuana patients."
Recreational marijuana was legalized in California following voter approval of Prop. 64 in November, 2016. Under the new law, adults 21 and over can legally use, possess and transport up to 1 ounce of marijuana for personal use. Marijuana can be consumed in private, but not public spaces.
A recent study found that California’s virgin recreational marijuana market will generate $5 billion in annual revenue. California’s recreational marijuana market (commencing operation in 2018) is pegged at $5 billion per annum according to a study by the University of California Agricultural Issues Center. More than 1,200 jobs will be created just for testing and handling of cannabis. The combined Rec and Medical sectors will employ at least 70,000 people directly (@ one employee per $100k).
Lori Ajax, the director of California’s Bureau of Marijuana Control, has hired the agricultural center to investigate the economic impact of the new marijuana rule set. California will begin issuing licenses to sell Rec marijuana in January.
“It’s going to take some time, while it’s unlikely that everyone will come into the regulated market (including former-illegal growers) on day one, we plan to continue working with stakeholders as we move forward to increase participation over time.”
The study predicts that regulation and legalization will boost California’s tourism industry as visitors come to the state simply to obtain cannabis legally. In the longer term, marijuana is trending to be legalized everywhere, under a format similar to alcohol. Ten years hence, places that prohibit marijuana will experience a loss in tourism from cannabis users, obviously. With more than 260 million tourist visits to California each year, who spend $122 billion in the state on leisure and services, marijuana legalization (not including weed sales) by itself, stands to bounce overall tourist visits and spending.
“Given that adult-use cannabis remains illegal in most other states, California’s legalized adult-use industry has to attract new visitors whose primary reason for visiting the state is cannabis tourism, as has been similarly observed in Colorado,”
It is estimated that as of November, annual California medical marijuana sales were $2 billion, which makes up about 25 percent of total marijuana revenues, while sales in the black market is estimated @ $5.7 billion. Legalization of rec marijuana and the market’s new regulations are expected to reduce the state’s medical marijuana sales to about $600 million, as some users were obliged to obtain a medical marijuana recommendation to purchase cannabis legally.
Contrary to this study is the fact that many recreational users are actually self medicating to relieve stress, anxiety, to sleep or to treat some other underlying condition. Medical Marijuana Card holders have many benefits under the new laws, such as up to 35% discount on medical weed. So it is not a slam dunk that medical marijuana sector sales will go down. As the black market, buyers of weed go to licensed weed dispensaries, there could be an avalanche of applications for medical marijuana cards.
“Revenues for medical cannabis in Washington State, for instance, fell by one-third in the first year after the legal adult-use cannabis system took effect, and by more subsequently.”
In Colorado, registered medical patients dropped by 10% from 2015 to 2016, and is trending up in 2017.
Once California implements its regulations, legal medical marijuana is expected to make up about 10% of the overall market. About 30% of cannabis consumers will probably continue to obtain their cannabis through illegal means to avoid higher costs on retail marijuana due to product tracking,testing, and taxes. Legal adult use Rec marijuana is expected to come at the balance, of 60%, plus or minus a couple of points.
"An appropriate strategy is to initially keep the marijuana taxes and testing costs low ,something like 10% or so. That way most everyone will switch to legal marijuana because there will be no cost incentive to go with a black market dealer. After a couple of years, most of the black market dealers would be wiped out. Then, they could raise the tax up to 20% or so. At the end of the day, they don't want to raise the tax to more than 30% because it will be back to square 1, people will turn to the black market. It is really that simple, but our politicians are not the brightest, and, at this point, their wisdom in matters like this is random." - Johnny Rodriguez
“We project - that when legally allowed -slightly more than half of the demand in the illegal adult use sector will quickly move to the legal adult use sector, to avoid the inconvenience, stigma, and legal risk that come from buying from an unlicensed seller.”
The findings in this state sponsored study rhyme with projected figures from other market research reports. For example, Arcview Market Research and New Frontier estimated that California could gather $1.6 billion in recreational sales alone in its first year of legalized sales (2018) and grow at a rate of 20% per annum, reaching $6.5 billion by 2020 before per capita growth tops out.
420EvaluationsOnline: Until January 1, 2018, all Californians must obtain a medical doctor's recommendation to purchase marijuana anywhere legally in the State. Fortunately, the legislators have approved the use of Telemedicine, which is the provision of medical services via digital means, i.e. the internet via computer devices.
The process is very easy, just fill out the questionnaire and a person will review your file immediately, then forward the orderly document to a licensed doctor, who reviews your conditions and symptoms. Your approval can take minutes and seldom takes more than a day. Patients don't pay unless they are approved. Our Cannabis ID Cards and recommendations are accepted by dispensaries, delivery services, cooperatives, cannabis clubs, compassion clubs, and other points of access. You may also save up to 35% on the marijuana tax in Nevada, in many, but not all precincts.
California voters approved Proposition 64, making the recreational use of marijuana by those 21 and older legal. In barely more than six months, state officials have to make sure Prop 64 becomes a reality by putting a legal and regulatory framework in place.
Regulations for production and sale of adult-use cannabis are due at the beginning of 2018, and the scope of the rollout is huge and includes, cultivation, manufacturing, testing, distribution and sales.
“The clock is ticking, We all know what we have to get done and failure is not an option for us.” - Lori Ajax, Chief, Bureau of Medical Cannabis Regulation for California,
Lori is in charge of coordinating California’s efforts to oversee a cannabis industry that some estimate may soon be worth between $4 billion to $7 billion.
"So Bush certainly wasn't the greatest, and Obama has not done the job. And he's created a lot of disincentive. He's created a lot of great dissatisfaction. Regulations and regulatory is going through the roof. It's almost impossible to get anything done in this country." POTUS Trump
Editor's note: Trump delivered, maybe 30% on his promises, and maybe he'll even deliver on 50%, which is better than Obama, who came in at 0%, actulaly it's lower than that.
Business experts expect California’s cannabis industry to quickly become the largest marijuana market in the country once the provisions of Proposition 64 take effect. For reference: Washington and Colorado had over one billion dollars’ worth of marijuana sales in the first half of 2017. California, by comparison, had over two billion dollars in sales of just medical marijuana in 2016, before the bill had even passed,
The Hill reported. Financial experts claim that few industries offer the growth potential of legal marijuana. Yet this profitable and exciting market is also young and untested, and its regulations change almost daily. Successful cannabis businesses must adapt their business models and prepare for the coming effects of Proposition 64.
California is taking a business-friendly approach to cannabis commercial activity.
Remember those 200-plus pages of medical cannabis regulation the State of California issued at the end of April? You can pretty much toss those out the door for cannabis cultivators, manufacturers, distributors, and retailers. Last week, in a huge step forward for marijuana law reform, the California Legislature passed Senate Bill 94, which effectively repeals the Medical Cannabis Regulation and Safety Act (“MCRSA”) and incorporates certain provisions of the MCRSA in the licensing provisions of the Control, Regulate, and Tax Adult Use of Marijuana Act (“AUMA” aka California’s recreational marijuana law).
Editor's note: We will believe it when we see it.
“Believe nothing you hear, and only one half that you see.” - Edgar Allan Poe
CALIFORNIA voters approved Proposition 64 – or the Adult Use of Marijuana Act (AUMA) – on November 8, 2016. This historic legislation legalizes growing, possessing, and selling marijuana for recreational purposes
The law is straightforward for adults over 21 years of age, who can possess up to one ounce of marijuana and cultivate up to six plants for their personal use. But when it comes to operating a recreational cannabis business, AUMA is far from simple. In fact, it will be virtually impossible to complete the recreational marijuana business licensing process without the assistance of an experienced California marijuana business lawyer. Attorney Jessica McElfresh has helped numerous marijuana businesses through the licensing process......
"Lawyers are the only persons in whom ignorance of the law is not punished."