Studio City: SeeCanna’s Luis Rivera.
When Proposition 64 passed in 2016 legalizing marijuana sales in California, Sherman Oaks dispensary owner Jerred Kiloh and hundreds of other cannabis retailers hoped for it would provide a big boost to the industry.
“There was an existing, mature industry that was thriving before Proposition 64,” said Kiloh, who owns Higher Path, a dispensary in Sherman Oaks and another dispensary in the Bay Area. By legalizing marijuana sales, he said, “the purpose and intent of Prop 64 was to reduce the size of the illicit industry” and bring even more revenue into the legitimate industry.
Instead, things have gotten much worse for local cannabis dispensaries. When the law first went into effect in 2018, there were licensing delays and a wave of communities enacting bans on retail sales of cannabis, which forced many cannabis businesses to close.
More recently, though, licensed cannabis retailers have found themselves in a struggle for survival against a thriving black market whose players don’t have to pay high taxes and comply with stringent regulations.
According to the United Cannabis Business Association, a Sherman Oaks trade group headed by Kiloh, there were an estimated 8,000 cannabis retail outlets in California in 2017, before the law took effect. The group drew that estimate from the website Weedmaps.com, which attempts to map every cannabis business.
Today, the association said, there are roughly 850 licensed dispensaries statewide, a staggering drop of nearly 90% in just five years.
According to an October report from the Los Angeles city Department of Cannabis Regulation, the department had granted about 525 temporary approvals for cannabis businesses in the city; how many of those are retail storefronts and how many have actually opened were not specified.
“We fought so hard to get us from the underground market and into the light,” said Javier Montes, who is managing partner and owner of the Wilmington-based Delta IX THC dispensary. “But then, for the industry to come to the point of extinction – after all the effort we have put in building our businesses, complying with the regulations, paying the taxes – it’s exhausting.”
To Read The Rest Of This Article By Howard Fine on San Fernando Valley Business Journal
Published: April 25, 2022
Founder & Interim Editor of L.A. Cannabis News