Economics 101 teaches us about supply and demand, but you don’t need a business degree to see that the supply of recreational marijuana retailers is way lower than the demand in California. For every 100,000 residents, there is less than one store available that sells adult-use product, according to recent data released by Marijuana Business Daily. Furthermore, most of those stores are crammed into a few select areas, due to the fact that Prop 64 allows local governments to opt out of allowing sales or cultivation, though they are not allowed to ban personal use. To be more precise, there are 482 cities in California, and to date, only 70 of those cities allow retailers to sell recreational marijuana.
Comparatively speaking, this puts California not only behind its own estimates for store fronts and sales figures, but also behind its peers. It’s been nine months since recreational marijuana sales began in the state. At the nine-month mark in Colorado, the state had awarded 242 licenses. Considering the state has a smaller population than California, this put the total at 4.3 stores per 100,000 residents. Now, Colorado has 10 times the amount of stores per capita, while Oregon currently has 15 times more recreational marijuana stores per person.There also is a disparity in shops readily available to each person, an imbalance created by areas like Bakersfield and Fresno. Each is a densely packed city that has banned cannabis sales. The combined 900,000 residents have to travel more than an hour to get access to legal recreational marijuana. Divided among the 70 cities that allow recreational sales are 358 licensed adult-use cannabis retailers. Three of those cities – San Francisco, Sacramento, and Los Angeles – are home to half of those retailers, even though they are composed of only 14 percent of the state’s population.
It’s a shame, particularly because the supply/demand issue has nothing to do with a lack of product. Plenty of cultivators are growing cannabis in California, especially to the north in the area known as the Emerald Triangle. This area is the largest marijuana growing region in the world. But without the stores to sell product, and the testing facilities to keep up with ensuring the cannabis meets regulations, there are massive issues with bottle-necking along the supply chain. Unfortunately, this has driven both product and customers to the black market simply because there is not a practical, legal way to fulfill market demand throughout the state.
Our experienced Los Angeles marijuana lawyers are optimistic these numbers will balance out over time, especially as more cities adapt to allow for sales. For example, Long Beach is now among those who have lifted their bans on marijuana sales, with recreational programs beginning Sept. 1. It does not mean, however, that the transition will be easy. Each city not only has the right to ban cannabis sales, but also has the freedom to establish their own sets of regulations if they do legalize. That is where the knowledge of our trusted legal team can offer tremendous value to your business. We have a thorough understanding of how to balance local and state laws to cover marijuana businesses as they establish themselves and into the future.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients, defendants, workers and those facing criminal marijuana charges. Call us at 714-937-2050.
Searchable Database: See How Cannabis Laws, Support Differ Among California Cities, Jan. 4, 2018, The Cannifornian
More Blog Entries:
Hashing Out Cannabis Supply Issues, June 13, 2018, Cannabis Law Group