This Sunday, most of the world rang in the New Year with the regular fanfare and rigamarole. Meanwhile, the former sovereign now most populous state of California celebrated in its own special way: by re-legalizing marijuana sales. California, the world’s 6th largest economy, now offers cannabis for purchase en mase 111 years after the 1907 Poison Tax Act, which made it a misdemeanor to do so in within state borders. This move is championing, as California’s progressive influence extends far past counterculture.
There is now a veritable barricade of pro-cannabis consumerism on the entire West Coast. This unified front will be totally complete when Canada implements their retail cannabis operation this summer. Thus theoretically allowing a person to “walk” from Alaska ‘s westernmost island to Mexico’s border with Guatemala and legally buy weed every “step” of the way. Obviously, more than just two feet to do so, but geography aside, the mission is true. Ever thriving stock markets and windfall tax revenue are the financial rallying cries for a repeal once and for all. No doubt about it, global cannabis prohibition is taking major blows; with California’s most recent being touted as the final to bring down the house.
California Comes Around
Even though sunrise was not until around 7am, crowds waited overnight for the astronomical twilight hour ribbon cuttings. As of 6am on January 1, 2018, per the CA Emergency Regulations, recreational cannabis sales could officially commence. However, only 100 of the more that 2,700 dispensaries operating we granted temporary licenses in time for the new year. Those 100 shops are in a mere six counties: Alameda, Riverside, Orange, San Diego, Santa Clara, and Santa Cruz. Surprisingly, not a single shop was recreationally operational in Los Angeles or San Francisco on the 1st. LA now has four, all in West Hollywood. The lucky recipients doth not protest, as the few that could operate on day one are reporting sales upticks from 30%-60%. Fortunately for the thousands of other applicants and remainder of the states consumers, the Cannabis regulatory control board recently issued additional temporary licenses.
Notwithstanding, the minority few license holders are not the only ones riding the green wave. Frustratingly enough, markets were closed on Monday for the New Year’s Holiday. Nevertheless, Tuesday morning was greeted with open arms and wallets for hungry investors. A number of Canadian exchanged cannabis stocks saw huge increases instantly. From January 2nd intraday highs of over 55%, to over 200% returns on other wise investments, those that got in got it good. With Canada scheduled to initiate its recreational cannabis program nationwide this summer, all bets are on another rally with more unprecedented growth across many sectors.
Rising Tide Raises All Ships
The ripple effect does not stop at pot shops and hot stocks. The tertiary industry of cannabis cultivation and consumer support are waiting with baited breath to see what happens next. Now that anyone in California over the age of 21 is allowed to grow up to 6 plants, hydroponic shops are hoping to see more activity. DIGS Hydro in Vista, CA is thrilled. “We’re hoping that now the stigma is lifted more people will start getting interested in home-growing as well,” reports DIGS. “Even just a small setup is super rewarding endeavour and something we think everyone should try. We hope more people start to see this now that [cannabis] is legal here.” These sentiments are not solitary, as hydro shop owner’s across the nation express the same.
Less obvious are industries like payroll processing, general liability insurance, and the ever complicated finance solutions for cannabis operations. Many establishments must adhere to federal guidelines, therefore cannabis business often ineligible for coverage, lines of credit, landlord mandated insurance requirements, etc. Private lenders are generally the only avenue. However, payment processing solutions and cryptocurrency backed transactions are lights at the end of cannabis’ ongoing financial conundrum tunnel. Despite the billions in income cannabis is bringing in through sales and cultivation, this money is still almost entirely cash. Ironic considering the progress in prohibition repeal and illogical when it comes to an analysis standpoint.
Despite the magic of the moment, there are initial hiccups and missteps when it comes to transitioning into new policy. Washington, Colorado, and Alaska all have their issues. California will have theirs, too. Nonetheless, the world has much to gain and look forward to, growing pains aside.