Incoming state legalization, NYPD seizes vehicles selling unlicensed cannabis, & California’s new licensing process
By Kaitlin Domangue
State legalization is coming this fall
As many as six states will vote on medical or cannabis legalization in November – including my awesome state of Missouri!
5 out of 6 states are voting on recreational cannabis, which is amazing to think about.
I remember when Colorado legalized cannabis in 2012 – I was a junior in high school & it’s mind blowing to think of how far we’ve come since then.
(I also like to think my junior year of high school was 3 years ago even though I graduated in 2014 and am a mom of 3, but)
Arkansas, Maryland, Missouri, North Dakota, and Oklahoma will vote on recreational cannabis legalization in November, while Nebraska’s residents will say yes or no to medical cannabis legalization.
In Missouri, there was hesitation up until a week ago about whether or not adult-use cannabis would even make the ballot.
(We voted on medical cannabis legalization in 2018 and sales started in 2020.)
The organization collecting signatures and submitting the ballot to the state, Legal Missouri 2022, supposedly lacked the necessary number of signatures for approval at the end of July – despite submitting over 400,000, far exceeding the required amount.
Legal Missouri raced to submit additional last-minute signatures for certification and thankfully, the state approved it last week.
Missouri’s voters (including me) will say yes to Legal MO’s bill on the midterm ballot.
- 144 new businesses will be awarded via lottery, but all of them will be reserved for applicants who meet social equity criteria. Existing medical cannabis business licenses will get the first chance at adult-use approval.
Oklahoma’s advocacy group submitted more than 164,000 signatures to the Secretary of State in early July.
- For the first two years, Oklahoma’s recreational bill limits adult-use licenses to medical cannabis operations only. Clearly, Oklahoma has learned how quickly an open market for a highly-regulated industry can go unchecked and is taking steps to prevent that from happening again.
A citizen-led initiative to vote on medical cannabis was submitted in Nebraska at the beginning of July.
Cannabis is decriminalized up to one ounce in Nebraska, so this vote would be monumental for the state and the country – there soon could be no illegal states left.
Should Nebraska say yes to this bill, regulators would begin issuing licenses by October 1st, 2023.
What I’m Thinking 🧠
One by one – the dominos fall, y’all.
More and more states are legalizing cannabis and eventually, all 50 states will have a medical or recreational cannabis program of some kind.
In absence of federal legalization, states are exercising their right to legalize cannabis. The separation of federal and state powers is a fantastic thing.
So are citizen-led initiatives, which 5 out of the 6 potential cannabis initiatives on November’s ballot are. Maryland’s recreational cannabis measure was the only one passed by the state Legislature.
(Not every state has the right to bring signatures & a ballot to their government, btw, so it’s not something to take for granted. It’s how a majority of cannabis programs exist today.)
Every election season is exciting when you work in cannabis. I’m particularly excited to see how Missouri’s election plays out, of course, but I’ll be keeping a close eye on all states during the November votes.
NYPD seized vehicles selling illegal cannabis in Times Square
19 vehicles were seized by the New York Police Department for selling cannabis without a permit – and not at all subtly, as you can see here by the Mystery Machines of cannabis that were apparently casually hanging out in Times Square.
The vendors didn’t have permits to sell food, including the cannabis-infused gummies being sold from the vehicles, so a non-infused vendor selling food without a permit would receive the same treatment.
Also – most of the vehicles had out-of-state plates & rarely moved from their spots because the sellers slept in their cars. The illicit cannabis market is worth $2 billion in New York, but it’s not necessarily the quiet & underground market it once was.
Unlicensed cannabis dispensaries operating out in the open is a huge problem for consumers and licensed shop owners, especially in California where recreational dispensaries are up & running. New York’s recreational market hasn’t started yet.
Weed World, one of the unlicensed trucks with several vehicles, paid more than $200,000 in parking fines the day before vehicles were towed away.
What I’m Thinking 🧠
Unlicensed operations out in the open like this hurt consumers and licensed businesses.
I will never say “crack down on every ‘illegal’ cannabis activity”, but I will say illegal operations who pose as legal operations are hurting the legal market.
Tourists who don’t know the laws or the difference are consuming untested & unregulated cannabis – 4 in 5 consumers want to verify the safety of their cannabis before purchasing it.
California’s market is dramatically changing
The California cannabis industry can be described in three words: a hot mess. And it’s not the fault of operators.
California is a hard market for operators to exist in, and that became especially true when recreational cannabis passed in 2016.
So much so that California cannabis executives sent a letter to state lawmakers begging for relief:
“It is critical to recognize that an unwillingness to effectively legislate, implement, and oversee a functional regulated cannabis industry has brought us to our knees. The California cannabis system is a nation-wide mockery; a public policy lesson in what not to do. Despite decades of persecution by the government, we have been willing and adaptable partners in the struggle to regulate cannabis. We have asked tirelessly for change, with countless appeals to lawmakers that have gone unheard. We have collectively reached a point of intolerable tension, and we will no longer support a system that perpetuates a failed and regressive War on Drugs,” signed cannabis executives from companies including Flow Cannabis and Raw Garden.
Some small changes have started to take place this year, like the removal of California’s cultivation tax. It was a relief for commercial cultivators across the state.
Despite the challenges, obtaining licensure in California has been *somewhat* easy.
It can be expensive and frustrating, but the barriers to enter California’s cannabis market as an operator aren’t nearly as high as other states.
Well, that’s all about to change. California’s provisional licensing is coming to an end.
The last batch of provisional licenses in California were issued in June. Operators now have to apply for permanent licensure (which can take months or years) or purchase an existing licensed company.
As of mid-January, only 3,378 of California’s 12,221 cannabis business licenses had permanent licensure – which means 72% of the legal California cannabis market is operating on temporary licenses.
As of now, California has approximately 8,300 provisional licenses to transition to permanent permits by January 2026.
What I’m Thinking 🧠
It isn’t hard to see how this will likely dwindle California’s legal industry, but it was never the plan for provisional licenses to be permanent.
This was supposed to happen in 2020, but it didn’t – I suspect COVID-19 was to blame.
Transitioning from provisional to permanent licensure is expensive, which is why $100 million was granted last year to help streamline the transition for California cannabis businesses. But new applicants who don’t already have a provisional license won’t have a piece of that assistance.
And it will be significantly more difficult to obtain a permanent license than it has been to get a provisional one – especially considering thousands of provisional license applications have been backlogged for years. New applications won’t be the first priority.
Transitioning from provisional licenses to only permanent ones will result in dramatic shifts in the California cannabis market, but again – this isn’t coming out of nowhere.
Provisional licenses allowed operations to continue business as California’s fully legal program rolled out, so it’s going to be even more of a mess in the Golden State for awhile.
My sincere respect to anyone jumping through these hoops to make it in Cali’s legal industry – it’s not easy.