California set for New Year's buzz with
recreational marijuana sales
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[December 29, 2017]
By Steve Gorman
LOS ANGELES (Reuters) - California adults
not content to ring in the New Year with the traditional fizz of
champagne can look forward to celebrating with the buzz of marijuana,
purchased for the first time from state-licensed retailers of
recreational pot.
Dozens of newly authorized marijuana stores are due to open for business
across California on Jan. 1, launching yet another chapter in America's
drug culture and the largest regulated commercial market for cannabis in
the United States - one valued at several billion dollars.
The rollout is expected to be gradual and bumpy. The state only began
handing out licenses in mid-December, issued on a temporary basis
because implementing regulations were still under review.
Newly permitted retailers will rely on a hodge-podge of marijuana
producers in the state's illicit "gray market" to stock their shelves
for the next six months, until state-licensed growers can harvest their
first crops.
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And many jurisdictions, notably Los Angeles and San Francisco, will be
closed to business in the recreational pot sector for days or weeks
because of additional local approvals applicants must win.
Shops in San Diego, San Jose, the Bay area-towns of Berkeley and
Oakland, and Eureka - the heart of Northern California's cannabis
country - are among those ready to go on Day One, said Alex Traverso, a
spokesman for the state Cannabis Control Board.
"The market is going to be kind of rough getting started," said Jordan
Lams, chief executive of Moxie, a company based in the Los Angeles
suburb of Lynwood that specializes in making cannabis extracts,
including oils used in electronic vaporization, or "vape," devices.
He predicted supply shortages early on.
California led the way in legalizing marijuana for medical purposes in
1996, and more than 30 states have followed suit since then, though
cannabis remains classified as an illegal narcotic under U.S. law.
On Monday, California will become the sixth U.S. state, and by far the
most populous, to legalize, regulate and tax sales of recreational
marijuana - a market catering to consumers wishing to buy the drug for
its mind- and mood-altering properties.
MEDICINAL VS. RECREATIONAL
Colorado, Washington, Oregon, Alaska and Nevada were first in launching
recreational pot sales on a state-regulated basis. Massachusetts and
Maine are on track to do so in 2018.
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With California and its 39.5 million residents joining the fold, more
than one in five of Americans will now live in states where recreational
marijuana is commercially available to buy in state-licensed stores.
Many among the new recreational pot proprietors previously operated as
medical cannabis dispensaries, under a patchwork of local regulations.
Some will now be licensed by the state to sell both.
The recreational sector - what state regulators prefer to call the
"adult use" market - is considered more lucrative.
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![](../images/122917pics/news_d7.jpg)
Marijuana plants for sale are displayed at the California Heritage
Market in Los Angeles, California July 11, 2014. REUTERS/David McNew
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"This is the moment we've been waiting for," said Daniel Yi,
spokesman for the 7-year-old Los Angeles-area dispensary chain
MedMen, which is expanding from a medical business model to serving
recreational users as well.
The stage for Monday's grand opening was set when voters passed a
ballot measure in November 2016, Proposition 64, immediately
legalizing personal possession and use of recreational pot by adults
21 and over. They could also grow their own.
But it has taken California lawmakers and bureaucrats over a year to
devise a licensing, regulatory and tax structure for all phases of
the commercial distribution chain.
A key goal of the new regime is to eliminate California's illicit
marijuana production and farms, which account for roughly 60 percent
of the nation's pot supply and are blamed for degrading the
environment.
Supporters also point to a hefty new tax revenue source that by most
estimates will total $1 billion a year. Both medical and
recreational cannabis will be subject to a 15 percent state excise
tax, though medical pot will be exempt from regular state sales
taxes.
Recreational customers are limited to buying no more than one ounce
(28 grams) of raw cannabis or its equivalent at a time, though
individuals may grow up to six plants per person.
Investors have expressed an eagerness for a piece of California's
burgeoning legit marijuana market, estimated to be worth $4 billion
to $11 billion.
![](http://archives.lincolndailynews.com/2017/Dec/29/images/ads/current/library_lda1_112717.png)
Opponents, however, have argued liberalized marijuana laws carry
major public safety risks and make pot more accessible to
youngsters.
Analysts expect much of the illicit trade in recreational pot will
quickly gravitate to legit retailers as prices come down and reach
parity with the illegal market.
An eighth ounce of "fairly good-quality flower," labeled with such
names as "Blue Dream," "Youth in Asia" and "Super Glue," will go for
about $35, said Yi of MedMen, which plans to wait until Jan. 2 to
launch recreational sales in two of its sleek, artisanal shops in
West Hollywood and Santa Ana.
Three other MedMen shops within the city of Los Angeles will
probably have to wait for at least a few weeks, Yi said.
(Reporting By Steve Gorman, Editing by Ben Klayman and Rosalba
O'Brien)
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