Greed a Big Concern
David McCollester, a property developer in Lake County, believes greed is a main driver behind the forces that control our markets. We’re seeing the results of this greed right now.
“I think legalization took nearly 25 years because the 1% that work closely with government had to figure out how to corner the lion’s share of the market. Now, any hope of a profitable cannabis market will be like going bird hunting and never being able to take the dog off the leash…What government has done here is recognize the profit margin of a black market business model, applied it to a legalized agricultural model, siphoned off any profit margin and basically hobbled 95% of the small and mid-level growers.”
Butte County activist Jeff Pflueger agrees.
“The state has taken this thing over lock, stock and barrel. They’ve skewed the regulations in favor of a few and will kill off the medium to small growers. Then they will turn around and subsidize the big companies with taxpayer funds because the taxpayers voted for it. This is exactly what happened in the tobacco industry!”
The state’s recent decision to allow grows larger than one acre particularly concerns medium and small growers. Prop 64 restricts the size of grows, limiting cultivation licenses to one acre to increase variety and market competition. Removing these caps has sparked vociferous protests from both legislators and trade groups in the North.
California Growers Association has filed a lawsuit to prevent issuing these larger cultivation permits. One of their arguments: “The cumulative individual decisions of small and medium cultivators to remain in the illegal market due to an inability to compete with large cultivators will harm the local economies of traditional cultivation regions of the state by reducing tax revenue in these areas.”
In other words, if they can’t compete on the legal market, they’ll do it on the black one.
Will the Black Market Boom?
Jason D. Andrews owned one of the first SoCal delivery services, Prop 215.com. He’s also a patient who uses cannabis instead of opiates or other pharmaceuticals for PTSD, four ruptured discs and sciatica. “It doesn’t take the pain away,” says Andrews, “but it does keep my mind from dwelling on it.”
Andrews believes the new rules are setting up a huge black market boom.
“An eighth of smoke costs around $35 to $50 average, and has forever, depending on your source. An ounce is over $420 now, even as high as $500, which comes out to around $8,000 a pound. If I can get a pound for anywhere between $400 to $2,000 on the black market, why would anyone ever go to a legal shop and get ripped off?”
There’s no question the black market still thrives in other legal states where excessive regulations create price surges. Southern Nevada activist Ray Adams says Nevada legalization has severe black market issues.
“I personally believe that the high price per gram coupled with the second or third highest taxation rate on cannabis is keeping the black market flourishing in Nevada. When the dispensary price is over twice what the street price is, I don’t think that we will see a reduction in the underground trade of cannabis.”
But Adams isn’t bitter. He believes the situation will eventually sort itself out.
“I’m not going to fault them for trying. They’re forging new ground here in an atmosphere where they feel that the establishment is waiting for them to make a misstep so they can be used as an example. I think that they are doing the best that they can given the hostile atmosphere that this is happening in.”
Nevada’s not the only state faced with black market woes. As Southern California activist Donna Lambert points out, Colorado has so many problems with illegal sales that it recently proposed a bill to add chemical tracking agents to cannabis products. Don’t worry, the chemical agent isn’t here; but when it is, the state will grant the licensing rights to a sole vendor. Monopolies are always a great idea, right?
We Still Have Criminal Penalties but There’s Progress
Los Angeles activist Patrick Moore acknowledges past criminal convictions are being erased using Prop 64 (AUMA) provisions. Nevertheless, he worries both AUMA and state regulatory schemes contain too many new criminal penalties that’ll catch more victims in their nets.
“Just wait until the enforcers are grabbing those new taxes to do what they do. It’s about to get ugly!”
Yet Wesley A. Bridle, Economics major at UCLA, likes the criminal penalty changes. He points out that former felony offenses are now misdemeanors, and therefore don’t void the vote of the person charged.
Butte County Activist Victor Neuman sees these changes in a different light. “When some people think fines, drugs tests and misdemeanors are a proper step forward, they need to be reminded that this is not legalization.”
California veteran and patient Albert Vigil agrees, concerned over the remaining criminal penalties.
“I bet when all the jails are over-filled with people that smoke weed and they have to take care of everyone, they will see that we don’t want weed to be illegal anymore. They will have to do something then. The state will go bankrupt otherwise, and we will now have Trump and Sessions to blame, not Obama and Hillary.”
Patient Ken Banham worries about overzealous law enforcement cracking down on drivers as well.
“My main concern comes from the signs I’ve seen on the freeway saying, ‘drive while high, get a DUI.’ I don’t think that they’ve got the science firmed up for testing cannabis impairment yet. They can’t know whether or not I smoked this morning or 10 minutes ago. I see a future of abusive cops hammering us because of a piece of dust in the eye or the smell of white sage.”
Can Rescheduling or Descheduling Solve Over-Regulation?
Jeff Jonaitis, an Orange County activist and long-time member of Norml, feels that patients and those who work in the industry are now getting over-regulation’s the short end of the stick. “All this greed and ginormous tax on a plant. Just regulate it like tomatoes.”
There may not be much time to complain about the new regulations if the federal government decides to de-schedule or reschedule. It looks as if Jeff Sessions may force Congress to address cannabis’ status under the Controlled Substances Act. Fontana activist and lawsuit plaintiff Mike Harris reminds us about Sessions’ statement that Congress should change cannabis laws if they don’t want to enforce them.
“I think Sessions is forcing the issue of ending the CSA scheduling where before legislators were happy to dodge the problem…Now voters have overwhelmingly shown what side they are on and the few on Capitol Hill have begun a swelling chorus of voices to act. Some more reluctant than others, but still not wanting to go against their own principles of states’ rights. The CSA has always been the key. And when it goes so will our state’s justification for over-regulation.”
Are We Repeating Other States’ Mistakes?
California may have been the first state to legalize medical cannabis, but it missed being the first to legalize recreational by a wide margin. Some activists from other legal rec states are witnessing the fallout of our new regulations and worrying we aren’t learning from their states’ mistakes.
According to Colorado activist Mark Pedersen:
“I am facing multiple felonies for my work with the poor and terminally ill in a so called ‘legal’ state. The image of legalization that the world has is far from reality. The suffering and the persecution still exist. Even though the majority of Americans believe cannabis should be legal, the majority of those who could benefit from the plant still don’t have access to it.”
Will California see cases like Pedersen’s before the end of the year? It’s very likely.
Mr. Pedersen may be right about continuing access problems as well. As it turns out, there’ll be new gaps in access, as some of former patient mainstays have switched over to recreational-only. This leaves former customers to find new sources for their medicine.
Chandra Batra, a long-time cannabis activist from Massachusetts, isn’t happy.
“I’ve been trying to wrap my head and heart around all of this. As a disabled patient, I feel betrayed and stepped on. Harborside became adult-use only on January 1st. They’ve ended their free care and are desperately trying to destroy their history as a patient sanctuary. I am truly upset about what this has done to pediatric patients and families.”
A statement from Harborside’s FAQ page confirms that they don’t have a license to sell medical cannabis. Since they don’t, those under 21 who once turned to them for help must now find other means of MMJ support.
“Harborside will continue to serve medical patients, however, we will not be able to sell quantities in excess of one ounce of non-concentrated cannabis (flower) or eight grams of concentrated cannabis…[it’s] unable to sell to any medical patient under the age of 21. Harborside will offer a 7.5% discount for medical patients with a county-issued medical ID card.”
To be fair, all businesses are facing difficult expense decisions as they pursue state licensing. Retailers who wish to supply both medical and adult-use cannabis need to seek separate licenses for each business category.
An Ongoing Legalization Argument
Even after hearing many complaints about the new law, Bridle remains certain things are a lot better than pre-legalization.
“If you are finding it hard to find positive perspectives on AUMA or more importantly MAUCRSA, then come to WeHo and talk to the people who are still, after three weeks, lining up outside the adult use shops here.”
At the end of the day, he has a point. It’s safe to say there’s no shortage of legal cannabis consumers in California. In fact, stores are struggling to keep up with demand. But tea also had a pretty good market this side of the pond before the British Tea Act.
Long-time OC Norml activist Al Moreno puts his current sentiments in a nutshell. “What else is taxed this high? We need to go underground. We need a Boston pot party.”
As Hermann Göring once said, “We will go down in history as the world’s greatest statesmen or its greatest villains.”
Deb Tharp is a cannabis activist, consultant, and writer. She began her cannabis activism at the age of 18, helping local candidates campaign door-to-door in the Midwest. Little did she know that the plant would save her husband's life a decade later. After watching him recover from the ravages of kidney failure and add 60 pounds to his skeletal frame in a matter of months, she was convinced that the war on weed must end. She ran for State Assembly in 2010 while completing her bachelor's degree at University of California, Irvine. She stood little chance of winning as one of the state's last Libertarian candidates, but she did manage to bring cannabis legalization to the forefront of the public debate. Little more than a year later, she was publicly arrested while gathering signatures for a local ballot initiative in Orange County. She fired back at the county by qualifying Measure CC in Santa Ana under Kandice Hawes' of OC Norml’s expert leadership. In the following years, she authored, qualified and helped to qualify over a dozen local legalization ballot initiatives across the state while teaching other activists how to do the same. She currently writes for Nugg, the nation's largest online cannabis marketplace, while pursuing her law degree at Taft Law School and will graduate in 2021.