When Will California Legalize Recreational Marijuana?
It’s a question that’s been on the mind of West Coasters since the passing of the Compassionate Use Act in 1996. As of Nov. 9, 2016, that question has been answered: NOW! Proposition 64 has passed, and recreational marijuana sales are poised to bring a colossal influx of cash to California businesses.
However, Proposition 64’s timeline isn’t necessarily intuitive. Its stipulations come in three different waves, the first starting the moment the vote passed, the third five years later. Here’s what cannabis consumers and ganjapreneurs can expect from the coming years of the California “green rush.”
Proposition 64 Passes in California
November 9, 2016
2017 is going to be a strange year for California’s cannabis consumers. The moment Proposition 64 passed, the way was open for persons 21 and over to carry marijuana flowers and concentrates, and to consume it in the privacy of a residence.
However, with controls on any sort of interpersonal exchange and no legal place to purchase recreational marijuana until 2018, Californians are left in a legislative limbo in which they’re allowed to consume marijuana, but not purchase it.
Luckily, this time is less dubious for prospective marijuana businesses and related industries. The downtime between passing and license distribution is ideal for getting all your proverbial ducks in a row. There are miles of red tape to navigate, not to mention all the little brand details that will become the core of your business!
Use this period to start building up the foundations of your marketing campaign. Claim usernames on social media, begin planning promotionals, determine the nuances of your service and brand. When new legislation rolls around, you’re going to want to be prepared to sprint out of the gates.
Recreational Business Licenses Distributed
January 1, 2018
Now this is a date that California’s cannabis businesses can get excited for. Jan. 1, 2018 marks the latest possible date for the appropriate state agencies to commence distributing recreational business licenses.
While it’s true that this is the first day a recreational marijuana business can legally operate in California, it should not be the first day of action. As mentioned above, prospective businesses should spend 2017 priming themselves for an explosive launch in 2018. Everyone and their mother is going to come rushing out of the gates on Jan. 1, 2018, and there’s no reason to straggle.
This also marks the day that the 15% excise tax stipulated in Proposition 64 will come into effect. This will affect both retailers and cultivators of recreational marijuana. Medical marijuana will remain tax-free under the provisions of the Compassionate Use Act (Proposition 215).
Monopoly Controls Fall Off
January 1, 2023
On the first of the year in 2023, Type 5 recreational marijuana business licenses will become available. With this license, a business can engage in a “large grow” — that is, an outdoor grow over one acre or an indoor grow of over 22,000 square feet of canopy.
While this mostly applies to prospective growers, the implications of large grows are many. Once agricultural giants can start putting their massive swaths of land to use growing recreational cannabis, the supply will skyrocket. Consequently, prices of marijuana flowers and concentrates will likely experience a steep drop.
This is good news for the corporate monoliths and other big players who want to break into the recreational cannabis field. Smaller players should beware of this date, however — the California recreational marijuana industry promises to be largely affected by it.
Small-to-midsize businesses should have a plan in place for Type 5 licenses. From 2017 until the end of 2022, there are two solid options:
- Build a service or brand that can’t be beat out by the sheer volume of a competitor’s output. Combine specialized services and/or products with exceptional customer service to accrue loyalty before the big dogs get in the arena.
- Position yourself to be able to make use of a Type 5 license. 2018 to 2022 promises bountiful growth to strategic businesses in the cannabis industry. As your business expands, invest in more farmland, a bigger storefront, larger concentrate-processing rigs, or whatever pertains to your niche of the business. When massive harvests of cheap commercial weed begin to pop up, you’ll be prepared to leverage it to your business’s advantage.
Is Your Business Prepared For the California Green Rush?
Whether you’re an established cannabis business or looking to expand into the industry, you need to start preparing now. The rich prospects of California’s recreational marijuana market have convinced many people to try and enter the market. Competition is already fierce, and it’s only going to ramp up as 2018 approaches.
Need help situating yourself for success? 4Blooms has a team with thousands of collective marketing hours and tremendous expertise — we’re ready to deploy and push your marketing efforts to their peak. Reach out to us today to see what we can do for you!