California’s legal cannabis industry has a projected value of $7 billion and tax revenues for local and state governments could reach as much as $1 billion a year, according to an Associated Press report. And under the state’s voter-approved legalization initiative, the state must have rules and regulations to police the industry in place by January 1, 2018.
To that end, Lori Ajax, the chief of California’s Bureau of Medical Marijuana Regulation, indicated that her “small but mighty” staff of 11 full-time workers is working to meet that deadline.
“We’re confident that we can get this accomplished,” she said in the report; however some officials and stakeholders aren’t as confident.
Democratic state Sen. Mike McGuire, said that the state is “building the airplane while it’s being flown,” questioning whether the state can transform the informal market into a formal one, and how they will create a coherent system from the loosely-regulated medical cannabis industry that has operated in the state for 20 years.
“It’s going to take us 10 years to dig out of the mess we are in,” he said.
Gov. Jerry Brown has proposed spending more than $50 million to fund the implementation of the new law. The funds would be used for hiring about a dozen regulators and establishing programs to collect taxes and issues licenses. According to the report, the governor has called for one regulatory framework for both the adult-use and medical markets.
Arron Herzberg, an attorney and CalCann Holdings partner, is skeptical that the state will have enough time to set up a regulatory scheme by January, calling the governor’s funding proposal a jumping off point.
“You are always going to have a black market,” he said, noting that in order for the new economy to work, “you have to reduce the black market to tolerable levels.”
Lawmakers are holding a meeting today to determine whether the state can meet the deadline.
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