New Year’s Day cannabis sales celebrations are a go across California just one day after the state cleared final hurdles to allowing recreational marijuana commerce.
California’s Bureau of Cannabis Control beat by 17 days a legal deadline to issue commercial cannabis licenses. By doing so, the BCC has set in motion a frenetic round of planning for New Year’s Day parties at licensed shops. Virtually no operator in the state knew exactly when the state would issue retail licenses. Now operators must scramble to prepare for the historic New Year’s Day launch.
HURRY UP AND WAIT
Santa Cruz based director of the retailer KindPeoples, Khalil Moutawakkil, said state regulators promised licenses by Jan. 1, but “we really didn’t know what that meant.”
With a retail sales license in hand, “Now we can really start to engage our staff and marketing avenues and all of our inventory in preparation for a lot of folks,” he said. “We’ll be stocking up making sure our shelves don’t go dry. We’re not planning to make the same mistakes as in other legalized states.”
Tony Hall, a principal at newly licensed San Diego cannabis retailer Torrey Holistics said the 30-person business had detailed plans for a New Year’s Day launch, but the plans sat in limbo until Thursday. “We’ve been having a lot of stress, because we planned out what we needed to do to get the launch done and we just had to wait. Now that licensing is done, it’s going to be a party.”
THE COMING CRUSH
The lines could stretch for blocks at KindPeoples New Year’s Day, depending on how many other shops also get licensed. Only a tiny fraction of California’s 400-plus cities and counties will have stores open in January. No official tally exists of cities ready to host adult use sales, said Sacramento-based licensing consultant Jacqueline McGowan. “We really don’t have guide form the Bureau as to what Jan. 1 is actually going to look like.”
“There is definitely the possibility that this could become an event that attracts new users from all over the Bay Area, I would think,” said Moutawakkil.
Hall said “we are definitely going to have a large amount of stock” and is expecting more than 1,000 adult use consumers on day one.
Licensed stores have plenty of advantages though. They’re situated in cities and counties at the forefront of regulating cannabis. The licensed shops comprise some of the most established medical cannabis dispensaries in the state, with years of operating experience and robust supply chains. They’ll need that acumen as they try to keep up with expected demand in the first days and weeks of the commercial market.
KindPeoples and others have obtained additional licenses to grow their own cannabis. But any additional re-stocking will require finding licensed distributors with inventory, which will be scarce at first. “That has the potential to throw a wrench in the spokes, but I think the state’s new system is designed to expedite the process for distribution and cultivation as well,” he said.
“You’re definitely going to have an issue keeping your shelves stocked,” said McGowan.
Stopgap measures should prevent total market failure. For example, regulators will allow un-tested cannabis can be sold with a disclaimer until more labs are licensed.
But shop owners are bullish. “California has never had a supply issue,” Moutawakkil notes.
“We have built up a very good pipeline,” Hall said. “We don’t anticipate too much of an issue like they had in Nevada. We’re good for a month or two.”
Dale Gieringer, director of the advocacy group California NORML said he is stocking up before the end of the year in anticipation of supply hiccups and high taxes — which will run as much as 41 percent.
“Prices will go up before they come down,” Gieringer said.
Store owners are also doing their best to adapt to just-released emergency regulations on things like child-proof packaging and new labeling requirements. Hall said. “You get three different interpretations for one rule and the one [interpretation] that comes up the most, you go with.”
HIGH MARKS FOR REGULATORS
Still, new licensees had high praise for both city and state regulators. Santa Cruz city officials confirmed KindPeoples local permit to the state within 30 minutes of the request, Moutawakkil said. “Santa Cruz was phenomenal,” he said. “I think the Bureau did a fantastic job in expediting the process for the industry.”
Hall said the BCC did an “absolutely seamless, fantastic job. They had a couple of notes about our application and we answered them immediately to their satisfaction.”
The relatively conservative San Diego beat much more progressive Los Angeles and legalization homeland San Francisco to adult use sales. “San Diego really has done administratively better than any city I’ve seen. They have regulated from A to Z,” Hall said. “It’s shocking the city of San Diego really stepped up and got out in front of this and did it right — I couldn’t be prouder of them.”
New Year’s Day promises to be a day for the history books, Hall said.
“In the bigger picture, it’s going to be a day in history, just like the end of alcohol prohibition. It’s a once in a multi-generational event. It’s going to be very large event that’s going to resonate across the U.S. because as California goes, so does the rest of the U.S.”
As for celebrating getting a license, there is little time, Hall said. “We all have families. I’m sure we’re going to pop an adult beverage and celebrate a little, and maybe some other adult substances.”
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