In 2016, voters in California approved Proposition 64, which allowed the sale of recreational cannabis to adults aged 21 and older and set up a framework for taxing cannabis cultivation and sales. Five years later, California is home to one of the largest cannabis markets in the country with cannabis companies selling $4.4 billion worth of marijuana in 2020.
California is also one of the few states that allows both medical and recreational use, having legalized medical marijuana back in 1996. Some experts say that if the state is able to mitigate the issues facing legal cannabis, California could have the largest cannabis market in the world.
So what lessons has the Golden State learned in the five years since that fateful night in November 2016? Well, most states with cannabis legislation have some sort of criminal justice and social equity provisions to offer reparations to the communities that were disproportionately impacted by the war on drugs. This includes earmarking funds derived from cannabis taxes to fund social equity programs, expunging the records of individuals with nonviolent cannabis-related convictions, and ceasing all cannabis policing and sentencing.
In this regard, Proposition 64 has been quite successful. Additionally, the runaway success of California’s cannabis market helped change people’s opinion about the controversial plant and bolstered political discourse on the risks and benefits of legalizing cannabis.
However, some aspects of the bill haven’t been as impactful as reform advocates had hoped. For instance, there were instances where some individuals who did not qualify as social equity applicants would push people from communities affected by the drug war into fake ownership roles so they could use the perks offered by social-equity programs such as priority licensing.
Furthermore, even with social-equity provisions in place, only a small percentage of minority communities, such as African Americans, are cannabis business owners. There have also been numerous complaints of insurmountable barriers to entering California’s recreational market, especially for small- to medium-sized businesses.
Experts say that the industry’s long list of requirements for license applicants and the high cost of entry has kept low-income applicants and people of color from tapping into the lucrative market. Additionally, most municipalities in the state still haven’t legalized recreational sales, limiting cannabis supply even though demand is higher than it has ever been; this is coupled with higher prices and supply chain roadblocks that keep the cannabis away from the customer’s hands longer.
These things have pushed users to California’s extensive black market. Fortunately, the cannabis industry is relatively young and has plenty of room to grow. As the sector matures, lawmakers will undoubtedly work to better align industry policies and practices with Proposition 64.
As the policies are fine tuned to bring to reality what voters had in mind when they approved Prop 64, the existing environment will undoubtedly improve for all sector actors, including Cannabis Strategic Ventures Inc. (OTC: NUGS).
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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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