California Is Growing More Pot Than It Smokes
And in this case, too much weed is actually a bad thing.
Recreational marijuana isn't being sold just yet in California, but according to one cannabis professional, there’s already a big problem for the recently legal retail market: The Golden State has more weed than it knows what to do with.
According to the Los Angeles Times, California cannabis growers are currently producing more than fives times the amount of pot than what is being consumed by the state's weed-inclined residents and medical marijuana patients. This surplus has cannabis cultivators under pressure to reduce output before state regulations per the November 2016-passed recreational initiative Proposition 64, which will ban the exporting of product to other states, takes effect January 1, 2018.
“We are producing too much,” Hezekiah Allen reportedly said to the Sacramento Press Club during a panel discussion on the state's marijuana dealings.
Allen is the executive director of the California Growers Association, an organization he helped to create in order to give voice to the state's marijuana farmers, as the recreational and medical weed laws are merged.
“We are on a painful downsizing curve.”
Indeed, in Sacramento, the panel concluded that the state's weed growers are going to have to choose to scale back production, or funnel their surplus harvest into the black market, which would put them at risk of violating state laws. The panel also noted that to combat overproduction, the state will need to bring as many licensed grows as possible, into the regulated market.
Lori Ajax, who heads the Golden State's Bureau of Medical Cannabis Regulation, and who joined Allen on the panel in Sacramento, acknowledged that some grows would never want to comply with state laws, stating that such operations would eventually face enforcement actions.
“For right now, our goal is to get folks into the regulated market, as many as possible,” Ajax said. “But, there are some people who will never come into the regulated market."
This particular problem has surfaced in states that previously legalized the drug, such as Washington and Colorado. And in both cases, it was the growers who took a hit.
In Washington, a surplus of product meant that wholesale prices decreased by nearly fifty percent, while retail prices remained unchanged, reports NBC. Some growers Evergreen State growers even resorted to giving their weed away for free, simply to move the inventory, and make room for new weed.
Colorado faced a similar predicament after legalization, when the number of licensed recreational growers quickly outgrew the number of cultivators of medical marijuana, according to The Gazette. For context, recreational and medical marijuana are different in that rec weed can only be so potent, or high in THC content, whereas medical marijuana does not have any potency limits, and is taxed at a lower rate than recreational cannabis,
To curb overproduction, Colorado implemented a “tier” system, which stated that all new grows were capped at 3,600 plants. Cultivators couldn’t move on to the next production tier until they could prove they could reasonably sell at least 85 percent of harvested crops.
But California is unique in that speculators estimate the recreational market will be ten times the size of Colorado's, and will have a more than $6 billion impact on the Golden State economy. And even though regulations won't be firmly in place until January, interested parties are already chomping at the bit to enter the space at every level.