Prohibition Ends: What to Expect from California’s Recreational Marijuana Legalization

A bar in California 1970's - AMC


California’s marijuana economy will mushroom to a massive $7 billion as new laws and regulations take effect

‘Prohibition Ends At Last! — Bartender’s Poised for Drinkers’ Rush’ reads the historic headline that fronted the cover of every newspaper on the morning of December 5th, 1933. More than just a headline, it marked the end of the dry era and the beginning of a new, less sober, one.

We are fast approaching another watershed moment like the one in December 1933. The world’s largest cannabis economy is on the cusp of going fully legal. January 1st is the landmark day that California’s Prop 64 goes into full effect — the legalization of recreational marijuana.

Like the end of prohibition, the dramatic shift in policy is bound to generate excitement, questions, and concerns about what this means for consumers and the industry. And this time, budtenders, not bartenders, are poised for a big rush.

Here’s an overview what you can expect in 2018.


Recreational Marijuana Will Make California’s Cannabis Industry Worth $7 billion in 2018

The state’s emerging legal cannabis industry will explode in 2018. The total marijuana market in California is projected to reach $7 billion dollars, with the state expecting to collect $1 billion in taxes.

California’s medical marijuana market is larger than the markets of Colorado, Washington, and Oregon combined. Recreational cannabis will drive California’s marijuana industry even higher (pun intended).

marijuana with dollar bills - AMC

According to a report in Forbes, experts project total marijuana sales in North America to soar to $10 billion this year. The billion-dollar industry will create growth in another area: jobs.

Much like Colorado, Washington, and Oregon before it, California will likely go on a hiring binge to keep up with the new demand. Not only businesses and dispensaries, new state positions will also need to be filled to regulate and monitor the new legalized economy.

As of January last year, there were only 11 full-time workers that worked at California’s Bureau of Cannabis Control. A staff of 11 people is unlikely to manage and regulate a $7 billion dollar industry in a state with a population of 40 million people. We’re going to need more jobs. Lots of jobs.


California Marijuana Legalization Will Bring New Taxes

California’s burgeoning marijuana industry will also introduce new taxes and regulations (surprise!). Taxes are projected to be high, with California expected to generate up to $1 billion dollars in marijuana tax revenue in 2018 alone.

There will be taxes on growers, retailers, and consumers alike — and when combined these taxes can reach as high as 45% for some parts of the state. Consumers will have to pay both state and local taxes.

cannabis law - AMC

Higher taxes mean that prices on recreational marijuana are likely to be higher to account for those costs. Some analysts predict that the black market for marijuana will be given new life due to these costs.

Regulations on Edibles, Quality Control, and Security

Starting January 1st, consumers and business owners alike will be subject to new regulations. The Bureau of Cannabis Control set regulations for quality control, security, and certain types of marijuana edibles.

Edibles will face strict new regulations, some of which pose a real challenge to edibles-based businesses. For example, edibles sold at dispensaries can no longer exceed a THC content of 100 milligrams.

recreational marijuana magazines - AMC

These same edibles must also be divided into separate servings, with each serving not exceeding 10 milligrams in THC content. Edibles that look like animals, humans, or fruit will also be banned outright. Goodbye, weed gummy bears.

Edibles will not be the only part of the dispensary that will face new regulation. Dispensaries and marijuana storefronts will be required to have a 24-hour security camera surveillance system. They also will have to close their doors at 10 PM.

Growers and farmers will also be under new regulations. The Bureau of Cannabis Control will introduce new testing procedures for unwanted toxins and mold. The specifics of these regulations are not yet clearly defined, but they will play an important part in ensuring consumers are protected from unsafe cannabis products.


The Beginning of a New (Legalized) Marijuana Era

The dramatic shift in policy will breed a lot of excitement and concern with the future trajectory of the cannabis industry. For now, you can expect an already booming marijuana industry to explode to new heights.

recreational marijuana flag - AMC

A multi-billion dollar industry being brought into the legal framework will also introduce a collection of regulations and taxes. These new rules can create new costs for consumers and businesses. There is also concern that new regulations will favor big cannabis over smaller, local marijuana businesses.

Concerns aside, January 1st is poised to become a landmark day for the cannabis world. It’s the exciting beginning of a new legal landscape for California cannabis consumers and businesses alike. We’re sad to see weed gummy bears losing their jobs, but there’s hope that the legalized industry will create many more in the future.


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