Nolte: Democrat-run California So Mismanaged Weed Business Requires $100 Million Bailout

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“The California Legislature on Monday approved a $100-million plan to bolster California’s legal marijuana industry,” reports the far-left Los Angeles Times.

Yep, the far-left state of California, which is governed solely by far-left Democrats, is so mismanaged the legal marijuana business is in trouble.

Let me restate that for emphasis: The legal marijuana business is in trouble in … California.

Nothing would make me happier than to learn the weed business is in trouble due to a lack of interest. But that’s clearly not the case. The reason the weed business is faltering is solely due to the state’s insanely burdensome tax and regulatory policies.

To legally sell marijuana in California, you have to obtain a state business license. So, by this time, after voters legalized weed in 2016, the state expected (and counted on for the tax revenue) at least 6,000 licensed cannabis shops to be up, running, licensed, and pouring revenue into the state’s greedy tax coffers.

But instead of 6,000, there are only 1,086 licensed stores. Which is a miss of over 80 percent, and the taxes and regulatory state are to blame.

“Many cannabis growers, retailers and manufacturers have struggled to make the transition from a provisional, temporary license to a permanent one renewed on an annual basis,” reports the Times, “a process that requires a costly, complicated and time-consuming review of the negative environmental effects involved in a business and a plan for reducing those harms.”

The Times adds, “Supporters of legalization blame the discrepancy on problems that they say include high taxes on licensed businesses, [and] burdensome regulations[.]”

“As a result, about 82% of the state’s cannabis licensees still held provisional licenses as of April[.]”

The ability to sell weed with only a provisional license is about to expire in January of 2022. And this is where things get hilarious…

In response to this epic failure, a sane state would realize it is over-regulated and make the necessary moves to decrease, simplify, and streamline the regulatory process required to obtain a business license. But California is not sane, so…

This $100 million is being spent to help cannabis stores navigate the regulatory state. I know how absurd that sounds, so read it for yourself:

“The funds, including $22 million earmarked for L.A., would help cities hire experts and staff to assist businesses in completing the environmental studies and transitioning the licenses[.]”

“Other cities that will get grants include Long Beach, San Francisco, Oakland, Commerce, Adelanto and Desert Hot Springs.”

Even so, Jerred Kiloh, president of the United Cannabis Business Association, says it’s too little too late. “It is a significant amount of money, he told the Times, “but I don’t know that it actually answers the problem of provisional licenses making it through CEQA [The California Environmental Quality Act] analysis in a timely manner to get an annual license.”

Things are so difficult, he says, some firms will need two to four years to complete the paperwork.

“The real problem is CEQA analysis is a very arduous process,” he added. “I think it would be good to have more reform of the licensing system instead of just putting money to it.”

California voters legalized weed in 2016, and Democrats create a regulatory and tax burden so cumbersome that five years later, fewer than 20 percent of the expected cannabis shops have been able to open up.

Follow John Nolte on Twitter @NolteNC. Follow his Facebook Page here.


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