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“HISTORIC LOWS FOR RETAIL CANNABIS” AS CALIFORNIA DUMPS NON-COMPLIANT PRODUCT
It’s Christmas in June for California’s cannabis users or, if you prefer, Purge Day for Weed. According to the SF Chronicle, as much as half a billion dollars worth of weed will have to be destroyed come July 1, and distributors are shrinking prices as fast as they can before that happens because, hey, two cents a gram is better than nothing.
California allowed for legal recreational cannabis sales beginning in January, the result of the ballot voters approved in late 2016, and with the new law comes new regulations–stricter labeling and testing requirements, for one. But the regulations also allowed for a grace period of six months for retailers to sell of their cannabis wares which do not meet the new requirements.
Now that six months is almost up and it is resulting in fear for those in the business and bargain basement prices for those just looking to cop some bud.
“I think the next couple of days here are likely to be historic lows for retail cannabis,” Hezekiah Allen, executive director of the California Growers Association, told SF Chronicle. “I don’t think you’ll see prices this low ever again.”
Some industry experts say that the party of dirt-cheap weed will likely be followed by a hangover of inflating costs, at least in the legal sector. After the white market loses $500 million in weed, a shortage is expected, because there may not be enough licensed businesses in operation to supply the state’s marijuana-hungry consumers.
“There is going to be a slowdown because I don’t think the statewide supply chain exists yet,” Allen said.
If the shortage comes, it will be right in time with what Erich Pearson, the founder of the San Francisco Patient and Resource Center, says is the time of year that brings the highest demand for 420 fare, the summer.
“I suspect we’ll have a shortage for a while until distributors get their testing figured out,” he said. “We’ll see limited supplies of brands and products, and probably lesser quantities, too.”
All that, plus the 15 percent excise tax imposed on legal cannabis purchases, is likely to drive buyers into the black market. “The black market is so large, and the taxes and regulations are so hard, that until the state decides to take action against the black market, it will remain a very robust and profitable business for those who participate in it,” Pearson said. “The over-regulation and taxation creates a very attractive alternative for consumers.”
Source: Dabs Magazine