California Cities Grapple with Cannabis Legalization - Verdant Distribution

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California voters passed Proposition 64, the Adult Use Marijuana Act, on November 8, 2017. Consequently, cities throughout the state are grappling with the best way to deal with the legalization of recreational cannabis and everything that comes with it.

California voters passed Proposition 64, the Adult Use Marijuana Act, on November 8, 2017. As a result, the Bureau of Medical Cannabis Regulation will begin accepting state cannabis business license applications in January of 2018. In order to apply for a state license, an applicant must have a local municipal cannabis license. Consequently, cities throughout the state are grappling with the best way to deal with the legalization of recreational cannabis and everything that comes with it.

In particular, City leaders are feeling pressure to balance the interests of those opposed to legalization in their cities against the interests of those who are excited to see the boost to their local economies that cannabis businesses will generate.

Some cities, such as Anaheim, have chosen to completely ban any cannabis-related commercial activities. The most common reasons for complete city bans are usually related to retail cannabis dispensaries (i.e., retail stores) because of beliefs that retail dispensaries will lead to loitering, criminal activity, public safety and health issues and increased traffic. Whether or not these concerns are legitimate (evidence from other states that have legalized recreational cannabis prove they are not), a complete city ban has the unintended consequence of barring other non-retail cannabis businesses such as cultivation, manufacturing and distribution. These non-retail cannabis businesses do not interact with the general public and do not raise the aforementioned common concerns used to justify a ban. Moreover, non-retail cannabis businesses are often very similar to other non-cannabis businesses already operating in the cities industrial zones.

As opposed to a complete ban on all cannabis businesses, a potentially more beneficial but still conservative policy that could be employed by a local government is the licensing of non-retail cannabis businesses while keeping a ban of retail recreational dispensaries. This would allow the city to avoid the potential concerns raised by the presence of retail dispensaries while still enjoying the increased tax revenue that could be collected from the cannabis industry. This suggested policy makes even more sense when you realize that the cannabis products produced or warehoused by non-retail cannabis businesses in a city will not even be sold in the city (since the city has banned retail recreational dispensaries) but the city will still enjoy the economic benefits.

For these reasons, Verdant Distribution, a California-based cannabis distribution company, believes local government should, at a bare minimum, be more welcoming of non-retail cannabis businesses. As evidenced in states which have recreational cannabis markets, state and local tax revenue can be in the hundreds of millions of dollars. This revenue can be used for city infrastructure, police and fire department expansion, parks and recreation and social programs. In addition, by regulating cannabis businesses in a city, cities can reduce the burden on police, fire and water/power departments to monitor and shut down the large number of illegal cannabis operations found in most cities. In fact, cities will find that the biggest advocates for identifying and shutting down illegal cannabis operators will come from locally-licensed cannabis businesses.

“Verdant Distribution is positioned to be the nation’s preeminent selling, logistics and data insights company for medical and recreational cannabis products. Verdant is committed to creating a safe, professional, trustworthy and accountable system for our partners in the cultivation, manufacturing, and dispensary industries and for the state and local communities in which we operate.” -Verdant Distribution

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