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Prohibitive Costs in California May Be Allowing Marijuana Black Market to Prevail

One of the Important Expectations of Legalized Recreational Marijuana is the Elimination of the Black Market

Prohibitive costs for legalized marijuana cultivation may be one of the biggest culprits preventing illegal marijuana growers from coming out of hiding in California. From a national perspective one of the justifications of the legalization of marijuana, especially for recreational use, would be to eliminate the black market. The cannabis industry needs states that have legalized cannabis to make every effort to stamp out the illegal growing and distribution of cannabis to provide proof that marijuana should be legal nationally, at least be removed as a schedule 1 drug. The desire for money by the state of California may be keeping prime farmland for marijuana growth to be used for legal cultivation. What incentives should states provide growers to give up dealing under the table?

In California’s famed Emerald Triangle marijuana growing region, cannabis farmers by the thousands have stepped out of the shadows to apply for permission to do business in state’s newly regulated marketplace.

The rush of applicants, totaling nearly 3,000 between Humboldt and Mendocino counties, marks the clearest answer yet to the question posed last year before and after the state’s landmark popular vote on recreational use of marijuana: Would growers and others in long-illicit parts of the trade come forward and participate in the new legal marketplace?

So far, at least in the northern parts of Cannabis Country, the signs are encouraging, officials said.

“It is a staggering number,” said Bob Russell, acting deputy director of Humboldt County’s planning and building department. “It is an unprecedented volume of applications for our department and likely for any other department.”

Plenty of issues are cropping up even in that formal process, including complaints of burdensome regulations and cost that growers fear will hobble them at key time, when the competitive field is taking shape.

Still, the Emerald Triangle may already have a head start on operators in Sonoma County, where the stampede of interest has yet to materialize, prompting talk among industry leaders concerned the area’s longtime cannabis producers may be opting out of the newly regulated market, at least for now.

Only 18 potential cannabis cultivation projects have submitted permit applications since they were available July 5, in addition to two manufacturers and a distribution plant, according to county staff.

The slow start has local cannabis advocates concerned a dearth of permitted cultivators could foreshadow a low supply of locally produced cannabis and be an indication farmers are taking a wait-and-see approach, maintaining their black-market sales.

“It’s incredibly low compared to the number of operators we have in Sonoma County,” said Tawnie Logan, board president for the Sonoma County Growers Alliance and a member of the county’s newly created cannabis advisory group. “It’s primarily because there’s no incentive.”

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Brian Wroblewski

Brian Wroblewski has a passion for writing, travel, food and family. Since working in and around the cannabis industry since 2008, Brian brings a unique perspective to the cannabis journalism space. With a focus on emerging brands, moving the cannabis industry forward and an undeniable passion for truth in business and journalism, find some of Brian's posts across the web on digital marketing, cannabis and a variety of different topics.

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