The legal marijuana market in California is finally taking shape. On Thursday, the state issued its first group of business licenses to transport and sell recreational-use marijuana only 18 days prior to the kickoff of legal sales January 1.
The 20 licenses, which are temporary and some of which were for the pre-existing medical marijuana industry, account for only a tiny fraction of the thousands of expected licenses to follow as California embraces legal marijuana starting in 2018.
CEO Jordan Lams of Moxie said he was very excited as the parent company Pure CA was the recipient of the first distributor license.
The first retail shop license went to Tony Hall at Torrey Holistics located in San Diego. The store has a pair of CPAs, a CFO and a director of marketing and submitted a lease of 60 pages, a detailed business plan and diagrams.
In general, the state will treat cannabis similar to alcohol, allowing those who are 21 years of age and older to possess as much as an ounce legally and grow six plants at their home.
The route last year to legalization started when voters gave their approval to Proposition 64 that opened the door for recreational marijuana sales to adults in the most populous U.S. state, home to one in every eight Americans.
A set of rules that can only be called patchwork has emerged with certain cities embracing the sales and others banning any commercial marijuana activity.
Businesses expect it is likely to take an extended period of time prior to the society adjusting to the legality of marijuana.
Many believe that with the new changes in legality starting in January there will be a period of transition as people understand that cultivation, sales and possession are now legal under certain limitations.
In January, the legalized sales will mesh with the two-decade old state medical marijuana market, which is coming under stronger regulation as well.
California and hundreds of its cities have struggled to devise regulations to govern a rapidly growing vast industry with a value projected to be as high as $7 billion. The online system of the state to apply for licenses opened only a week ago.
There is much uncertainty across the state about whether the White House administration would attempt to intervene in the states that have made marijuana legal.
As marijuana is not legal in the federal government’s eyes, major banks have been leery of doing business with growers and dispensaries so a large amount of the business will be done using cash.