California Cannabis Leaders Call for Meeting With Governor and Regulators to Discuss Industry Woes

After two years of legal sales, Golden State operators want Governor Newsom and the Bureau of Cannabis Control to make concrete changes to bolster the struggling industry.

Business leaders in California’s growing cannabis industry are banding together to call on state regulators and Governor Gavin Newsom to step in and implement adjusted licensing and operating procedures to promote growth in the legal sector and curtail the Golden State’s massive black market.

According to a new report from CNN, an informal group of more than a dozen licensed Golden State cannabis brands is seeking a sit down with Governor Newsom and Bureau of Cannabis Control officials to provide more marijuana licenses, lower taxes, and a stop to steep barriers to entry for prospective ganjapreneurs. California’s legal weed industry is expected to end 2019 with more than $3 billion in sales, but that number pales in comparison to the nearly $9 billion estimate for the state’s unregulated marketplace.

“The hard truth is that until legislative changes are made, our industry will continue to wither away,” Michael Steinmetz, CEO of cannabis distributor Flow Kana told CNN. Steinmetz said that Flow Kana is just one of many licensed California pot producers that has had to cut jobs in recent months thanks to previously unforeseen challenges.

With nearly 75% of all California cannabis sales still made in the traditional or black market, business owners like Steinmetz and his counterparts have struggled to draw customers to their highly taxed and hard to find legal weed.

“They didn’t realize how strong this illicit market was going to stay,” Dennis Hunter, co-founder of vertically integrated California company CannaCraft said. “I think people really thought that it was just going to stop [after legalization]. And actually, the opposite has happened. It almost feels like the illicit market is getting stronger.”

And with a new tax increase set to take hold in just one months time, cannabis businesses are worried that without concrete government intervention, the world’s largest marijuana market will alienate legal operators, lose out on more billions in legal revenue and tax funding, and at worst, potentially sour the concept of legalization on a larger scale.

“I’m hoping the state will step in and take some action to correct some of this,” Jake Heimark, co-founder and CEO of CBD edibles maker Plus Products told CNN. “If we don’t solve it here in California, I think it’s difficult to make a case for a national rollout.”



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