Pat Beggan

California Dispensaries Offloading Cheap Product; Shortage Looms with Regulatory Transition Period Ending Sunday

On Sunday, July 1, California’s adult-use cannabis industry will undergo a major overhaul.

When the industry kicked off in January, it came with a six-month grace period of “mandatory” but unenforced compliance. Most companies took advantage of this and have been conducting business as usual but, as that time comes to a close this weekend, there has been a rash of fire sales in dispensaries across the state as they try to offload tens of thousands of dollars of untested and potentially non-compliant cannabis products, the Desert Sun reported this week.

Some dispensaries are selling products at near wholesale cost, just trying to cut their losses and avoid having to destroy non-compliant product after the weekend.

Scott Lambert, CEO of The OG Collective in Cathedral City, said that even though he has reduced prices “by 70 or 80 percent in order to get rid of it,” he may have to destroy nearly $150,000 worth of product on July 1.

At least one company, Cathedral City’s Remedy Inc., is taking a more festive approach to the weekend. Owner Klint Jackson said the shop is hosting a big barbeque on Saturday to hopefully offload the dispensary’s remaining $20,000 to $30,000 worth of non-compliant product.

“The world explodes on the first. It’s a big event for us.” — Klint Jackson, owner of Remedy Inc., via the Desert Sun

For the most part, however, entrepreneurs remain wary as the industry barrels into the second half of the year. Even companies who have successfully pared down their inventory in preparation for July 1 are worried about fallout from the transition.

Chris Scagliotti, President of Green Cross Pharma, said that smaller manufacturers in California will have a harder time satisfying the industry’s demand after the weekend.

“You can’t reinvent an industry in six months. It’s just not enough time.” — Cris Scagliotti, President of Green Cross Pharma, via the Desert Sun

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