California’s legal cannabis market tries to stave off ‘extinction event’

The problems plaguing California’s legal cannabis market are reaching critical mass. Marijuana Business Daily reports that cultivators are “scrambling to revamp their operations” and stay in business as hundreds, if not thousands, of growers prepare to close up shop or leave the state.

The legal market has been battered by four factors:

  1. A glut in the market has caused wholesale prices to plummet
  2. Too many municipalities aren’t allowing retail sales, which means fewer avenues to distribute the oversupply of cannabis
  3. An “irrational tax system” in the words of Dr. Keith Taylor, who recently spoke with KCRW’s Greater L.A.
  4. A black market more than twice the size of the legal one that can sell cannabis at a much lower price

Marijuana Business Daily spoke to farmers who are letting their licenses expire to save money. Many are cutting their losses this season and forgoing planting altogether.

There are currently four bills in Sacramento and reforming the cannabis tax system. The next two years will be “dire” if the state fails to act, says Dr. Taylor.


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