Many people assumed that legalizing marijuana in California would be an absolute boon for any businesses associated with the cannabis industry. But it turns out many edibles makers are being completely shut out.
Green State recently ran a feature about how edibles businesses in California are beginning to go extinct. There are several reasons for this. One is that many towns and cities have begun banning these types of businesses after the 2016 referendum legalizing recreational marijuana, and the ones that do allow it often put them in industrial zones that are not ideal for retail ventures. Another issue is the increased fees and taxes associated with running these businesses that make it incredibly difficult to turn a profit. And another is simply that the state of California isn't giving these businesses licenses to operate legally.
It's estimated that around $180 million worth of edibles were sold in California last year. But there are currently only 28 companies with a state license to put marijuana into edible treats. One industry expert predicts that 75 percent of edibles makers currently operating in California will go out of business in the next few years.
So what can be done to help stop this extinction? First, cities that do allow edibles businesses should work to find them low-rent options for their locations. High rent, on top of increased fees and taxes that came along with legalization on January 1st, have greatly increased the barrier of entry for edibles businesses. On top of that, the state needs to make an effort to license smaller cannabis businesses as soon as possible before they completely go under.
But this story just once again proves that legalization does not come without growing pains.
(h/t Green State)