California’s Regulatory Red Tape May Leave The State In A Giant Surplus Of Weed.
California is growing too much weed; so much so that expert analysts fear that it’ll soon ruin the state’s marijuana market.
A SF distribution company, Vessel Logistics, told the Merced Sun-Star that the state houses 1,142 acres of permitted cannabis farms, which could produce 9 million pounds of flower per year. California’s legal wholesale market can tangibly only sell each year up to 1.8-2.2 million pounds.
What about the extra 7 million pounds? In the past, farms with free temporary licenses would turn to the black market to sell any product that could not get passed the state’s regulatory red tape. Since many farms relied on black market sales, cultivators over-estimated the state’s actual wholesale demand.
With the implementation of the Track-and-Trace program, which keeps account of cannabis from cultivation to sale, it will be near impossible to sell the extra supply, said Vessel Logistics CEO and president, Daniel D’Ancona. “If they grow like they’re used to growing ... the products are going to be selling for less than the cost of production.”
As California Marijuana Policy reported on the state’s lack of recreational sales in 2018, industry experts assume that in 2019 the state will bounce back as they open new legal distribution spots and work out knots in government regulation.