California Cannabis Operators Warn of Possible Industry Collapse

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Leaders of California cannabis companies warned Gov. Gavin Newson and lawmakers last week that the state’s regulated marijuana industry is in danger of collapse, calling for tax relief and an improved retail market to support ailing businesses. In a letter sent to Newsom, Senate President Pro Tempore Toni Atkins, and Speaker of the Assembly Anthony Rendon, more than two dozen cannabis advocates and industry executives noted that the goals of cannabis legalization in California included ending the illicit marijuana market and protecting public safety while creating an accountable regulated industry. But four years after the start of legal sales, the “industry is collapsing.” “We need you to understand that we have been pushed to a breaking point,” the cannabis industry leaders wrote in the letter to Newsom and legislative leaders. The Shortcomings of California Cannabis Legalization The letter cites several shortcomings of cannabis legalization in California, including high taxation for legal operators that results in dispensary prices that are 50% more than the illicit market. Industry leaders also faulted the ability of local governments to ban cannabis businesses from locating in their jurisdictions, a situation that leaves only one-third of municipalities with local access to regulated cannabis products. The result is a market ripe for unregulated operators, with 75% of the cannabis in California coming from the illicit market, all of it untested and potentially unsafe. Industry executives also noted the failure to adequately address the harms caused to communities of color by the failed War on Drugs. Taken together, cannabis legalization has led to a regulatory environment that threatens the viability of cannabis businesses, particularly legacy operators making the transition from California’s traditional unregulated market. “It is critical to recognize that an unwillingness to effectively legislate, implement, and oversee a functional regulated cannabis industry has brought us to our…

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Source : California Cannabis Operators Warn of Possible Industry Collapse

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