California’s Cannabis Industry is Worth $7 Billion

California lawmakers are rushing to connect the dots of the regulatory framework in time for the lucrative recreational industry on January 1. California’s cannabis industry now has a projected value of $7 billion and state and local governments could be collecting $1 billion per year in tax revenue. The state’s relaxed regulations on the medical cannabis industry have been in use for 20 years.

Senator Mike McGuire (D-Healdsburg) represents the 2nd Senate district which encompasses the North Coast region. California is “building the airplane while it’s being flown.” McGuire told the Associated Press. The Wild West era of the cannabis industry is coming to a close. It’s unclear how long it will take to finalize the details. “It’s going to take us 10 years to dig out of the mess we are in,” McGuire added.

California voters approved Proposition 64 in November, which will regulate cannabis like alcohol for adults over the age of 21. Recently, Governor Jerry Brown proposed spending over $50 million towards establishing a system to collect taxes and issue licenses. But even Governor Brown isn’t sure if $50 million is enough to cover the cost of the framework that is needed.

Thousands of men and women in the cannabis industry now need licensing. The new regulations outline almost 20 types of licenses. It could easily take a year to work out the details of the new regulations. Legislators will participate in a hearing Monday to evaluate whether the cannabis industry can meet the January deadline.

A “seed-to-sale” monitoring system in one of the state’s new requirements. Scanned tags are expected to be used to track the product through its journey from cultivator to the counter. McGuire recently introduced Senate Bill 175 which would protect county names from “improper capitalizing” coming from cannabis businesses that make incorrect marketing claims. McGuire’s bill is intended to protect the “prestige” of areas such as the Emerald Triangle in Northern California. This is one of many steps towards implementing the framework of regulations that are needed. State Treasurer John Chiang is running for governor and recently asked President Trump for clarity on how cannabis businesses can participate in banking institutions.

Recreational cannabis is projected to begin on January 1, 2018.