 California’s legal cannabis market continues to suffer, greatly, and now a large group of cultivators in California’s famed Cannabis Emerald Triangle are say they are facing “Socio-economic Collapse”, and are begging the government for help.
Data recently released shows that California’s legal cannabis sales declined for the year of 2022. This is the first yearly decline since California’s legal cannabis market began sales in 2018, according to MJBiz. The last three quarters of 2022 saw sales continually decline in the Golden State, bringing the state’s tax revenue down as well. This decline isn’t shocking to those in the industry, as over taxation has shrunk the legal market and increased the illegal one. Responding to industry pleas, California’s government officials did recently adjusted some of the taxation, shifting excise tax from growers to retailers. This helped the growers, but not the rest of the industry, and overall, the same problems remain. 2022’s sales decline translates to a $300 million tax revenue loss for the state. Since money seems to make the world go round, perhaps this revenue decline will get official’s attention and motivate them to finally work with the industry to make some real, positive changes. Cannabis farmers in Northern California have been particularly hard hit with financial struggles. Recently, a trade organization pleaded with California’s government for “urgent intervention to save their cultivation permits. The group, Mendocino Cannabis Alliance, represents hundreds of small cannabis farmers in Mendocino County, and sent their pleas in a letter to Governor Gavin Newsom and the Department of Cannabis Control. They group’s letter pointed out that for several years, many cannabis cultivators and companies have tried to do things the legal way, but thus far have only been operating on “provisional” licensing permits. However, the temporary transition phase for those provisional permits comes to an end this July 2023. Mendicino cultivators have been trying to have those provisional licenses turned into permanent ones, so they may continue operations after July of this year. However, due to what they say is local licensing dysfunction, thus far only six farmers have been able to receive their full annual state cultivation permit. Those six represent less than 1% of the 841 Mendicino County cultivators who have been waiting for their provisional permits to be transitioned to permanent ones. The trade groups letter says that even with great optimism, they only expect about a quarter of the remaining provisional permit holderscould possibly be able to get their full license before the July 1st deadline. That will leave nearly 600 cultivators without a permit come July, putting them out of business. The letter states that these estimates “that approximately 75% of cultivators who entered the permitting process in good faith beginning in 2017 will be unable to obtain a state license,” and rightly, they call it out as being “unacceptable.” Their letter further goes on to detail what they believe are the problems with the county level licensing procedures. They also compare their plight to similar ones in other nearby counties such as Humbolt and Trinity. These counties, along with Mendacino, represent what is colloquilly known as the “Emerald Triangle,” famed for it’s deep roots in the cannabis industry. The executive director of the Mendocino Cannabis Alliance, Michael Katz, said if something drastic isn’t done, there will be a tremendous trickle down effect on the local economy due to so many hundreds of businesses having to close. He said, “It’s a community-wide socioeconomic collapse we’re headed for, if we can’t provide support to help the small-batch operators weather this downturn.” The letter was sent in early February, but thus far, they have not received a response from the Governor’s office, or the California Department of Cannabis Control. Comments are closed.
|
RSS Feed