With legalization occurring at the start of the new year, California’s recreational cannabis market is on a major rise.
The recreational cannabis industry in California is growing rapidly, but the short supply of legal suppliers could cause price issues. State licensed cannabis grower, Aaron Flynn, is a rarity in the state’s recreational market, he stated
“What we have now is more and more dispensaries every week, but we have very few producers less than 10 percent in the state”
Flynn highlighted that less than 5 percent of the cannabis growers are local and state authorized. A shortage of registered producers is an issue for sellers. Registered dispensaries can only purchase from licensed producers and distributors.
There is a high demand for cannabis, but a low supply
Many of the distributors had or have permits to operate, so gaining a state license was easy to obtain, whereas most of the other producers have been operating illegally. In their cases, the licenses are taking longer, which hinders them from supplying the dispensaries that are in dire need.
Impressively, most of the established business owners anticipated the upcoming stock issues. A majority purchased enough early in the year that could supply them up to March 2018. The owner of the Medithrive in San Francisco, Ian Jones stated,
“We’re good. We’re projected to be fully stocked until March,”
But unlike the Medithrive, all retailers are not as prepared and will probably find themselves without any stock.
The San Francisco Chairman of the California Growers Association, Aaron Flynn, reported that there is a 2 to 3-week wait for the licenses. A resident of Chicago, Wendy Sierra said that she assumes the legislators drag their feet a little bit on this sort of thing because of the whole “I don’t know,” stigma.
It has been concluded by many that the lack of supply will cause a price rise and may take many months to level out.