Don’t hold your breath for the beginning of legal pot sales in California.
Though the passage of Proposition 64 green-lights retail sales of cannabis beginning Jan. 1, 2018, those sales hinge on local cities and counties permitting such activity. With a little over 90 days until the end of the year, no major city or county in California is on-track to do so and begin sales.
Today, the San Francisco Board of Supervisors introduced legislation confirming the city — known as the birthplace of the recreational and medical marijuana movement in the U.S. — will not have legal adult-use cannabis for sale come January. It could be months or years before anyone can purchase legal cannabis in San Francisco without a medical recommendation.
San Francisco’s delayed recreational launch mirrors the pace of cities statewide. Neither Los Angeles, San Diego, San Jose, Long Beach, Oakland nor any other major California city has created or issued a local license to sell recreational pot. Fresno has banned retail adult use sales.
Pot businesses first need such a local license before the state will grant a state license and allow retail sales to commence.
Unlike Colorado on Jan. 1, 2014, or Nevada in July this year, there will be no fanfare on Jan. 1 in California — no long lines, and no millions of dollars in sales and tax revenue.
“We’re going to slow-walk our way into full adult use sales,” said Sean Donahoe, a cannabis industry consultant who monitors legalization’s implementation across California. “I see a lot of slow starts.”
It’s not clear. Maybe in Berkeley, Humboldt County, Monterey County or Sacramento in early 2018, where local officials have at least discussed the idea, Donahoe said.
“Cities and counties just haven’t fleshed out the rules yet,” said Alison Malsbury, a cannabis-specialized attorney monitoring implementation at the firm Harris Bricken.
Before licensing any adult-use store, San Francisco intends to first license its entire medical industry and write rules mandating more minority owners and employees.
And with just 90 days left until legal sales are allowed to begin, it’s reasonable to conclude all of California will miss the starting date for recreational weed.
Yes — all adults 21 and over are already allowed to possess, transport and gift up to an ounce of cannabis to other adults 21 and over, as well as seven grams of hash, and they can grow up to six plants indoors.
Aside from that, folks should renew their medical cannabis cards or get them for the first time. Such a card grants them access to the state’s very robust medical marijuana system.
It’ll be very much “status quo” for medical card holders in January, said Alex Traverso, chief of communications for the California Bureau of Cannabis Control. “If you have a medical need, I certainly wouldn’t wait to address that need. The medical system will be the quickest way to go about it.”
It could be six to 18 months after Jan. 1, 2018 before cities begin to work the kinks out of the recreational pot supply chain — or even longer.
“I think that’s good advice,” Malsbury said. “There’s probably going to be a pretty big lag of six months before adult use coming online. The local jurisdictions can’t get their ordinances in place fast enough.”
Because Proposition 64 puts local cities and counties in the driver’s seat on implementing adult-use legalization. And most cities and counties have shown they’re in no rush to climb into that seat.
“Local governments working out their systems is what’s going to be the biggest delay in the process,” said Nate Bradley, a Sacramento-based lobbyist for Platinum Advisors and former director of the California Cannabis Industry Association.
One major reason: Many cities and counties are awaiting more direction from state regulators in the form of revised state rules, which are due out in November.
“That’s made it tough for local jurisdictions to actually draft ordinances,” Malsbury said.
“They feel like they need more time and don’t want to do something that’s rushed,” Traverso said.
A second reason is — despite voting for legalization — citizens have not held local officials’ feet to the fire and demanded prompt licensing.
Another reason: California never got licensed its medical pot system of farms, kitchens, and dispensaries over the last 21 years. So it’s playing catchup.
Part of is the reason is because San Francisco — like Los Angeles and Oakland — already has such a large medical cannabis industry, with around 34 operational medical stores.
“The more complicated and sprawling mess, frankly, the large authorized industry is, the larger the issues are,” Donahoe said. “But because of the size of the industry, this makes it all the more necessary to transition to adult use.”
San Francisco also has full employment, robust tax revenues and a long list of non-cannabis city business to attend to. Pot can wait its turn, because San Francisco can afford to do without it.
It’s tiny California cities with low tax revenue and business activity who may have incentive to begin permitting and taxing recreational sales quickly. Small rural cities like Adelanto in southern California’s high desert, and Cathedral City have rushed to license vast recreational cannabis farms. Over $1 billion in new taxes is expected under fully functioning California legalization.
“They’re extremely gung ho,” said Traverso. “They want to know exactly what needs to happen and be ready to go.”
The first legal retail sale in modern California history will likely occur sometime in early 2018, with little fanfare or advance notice, in a small, ambitious city that wants the revenue and headlines. Stay tuned for where that is.