The groupof marijuana dispensaries, farms and other smaller businesses are contestingthe regulations set out by the state in November 2017.This comesin an effort to help protect their growing businesses against the largercorporation and businesses. These large-scale investors could force the minorfarmers and entrepreneurs out of business. On November23 a lawsuit was filed against the state Department of Food and Agriculture fortheir lack in enforcing restrictions on the total amount of growing licensesthat may be obtained by any person or company. Thereby allowing the large-scalepatron to operate vast companies and corporations, squeezing out the localcannabis dispensaries, farmers, weed delivery services, and other small-scale,locally operated business. The large-scalecompanies could occupy the marketplace if the state does not implement a limiton how many licenses can be gained by a single company or individual. Thisfailure by the state to protect the emerging market could have a potentiallydevastating effect on the small to medium scale farmer, the local entrepreneurand the locally owned cannabis dispensaries.
In 2016,voters who approved Proposition 64 held no noticeably defined policies ormandates however they did put forward a five acre limit for each individualfarm or business. This was to promote protection for the already present cannabisbusinesses. The proposed limit was suggested to be in place for the openingfive years. These primary five years are crucial to the existing farmer andlocal businesses to gain an iron grip in this fast rising market. The five acrelimit could protect the small-scale and locally owned businesses and farmers byputting a cap on the size and yield of the large-scale companies. The GrowersAssociation were counting on the five years as enough time to get them set up,running and a significant part of the local economy. The California’s GrowersAssociation’s Executive Director, Hezekiah Allen, said that the larger scaleinvestor or business may be able to amass many licenses.
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This lack of limits onthe number of licenses these businesses can obtain and the loophole createdcomes despite the Adult Use of Marijuana Act promoting provision for theprotection of the small-scale farmers and businesses. In November2017, the newly released regulations dissolved the 2016 voter’s supportedprovision of five acres per individual entity. The new limit is set instead onno more than one acre of cannabis grow per license, leaving a loophole allowinglarge scale business free to stack licenses and obtain a significantly largersize of marijuana yield.
The stacked licenses would give way for multiple acresto be obtained. These large yields will bring down running costs for the largerbusiness and thereby reducing the price of the sold marijuana for recreationaluse. This threatens the smaller scale businesses. Thelarge-scale businesses and companies could potentially flood the market withtheir lower costs giving way to lower prices. This will regulate the economyand make the smaller scale businesses unable to compete in the market and bedriven to the black market, causing the illegal market to grow once again.
Allen saidthat the main areas that will incur suffering from this and their affectedbusinesses would include the Trinity, Humboldt, and Mendocino counties. Thesethree counties are by some research and estimates believed to be the countiesthat produce just less than two-thirds of the marijuana that is consumed by theUnited States. Thedefinition of a large scale license is that of any one farm that is equivalentor greater than one acre. The regulations set out in November 2017 holdrestrictions for these types of larger scale licenses for the first five years. On theother side of the fence sits businessman Steve DeAngelo. DeAngelo is currentlyoperating dispensaries on a large scale and a large agricultural site. DeAngeloargues that the lower costs and lower price of the product is a positive aspectfor the market. He counters that these low prices will be welcome in the faceof taxes and costs already increasing due to the recent Legalization.
DeAngelo’s marijuana distribution company, FLRish holds a four acre site forgrowing and cultivation in the Salinas Valley. Steve DeAngelo isreported to have spent around $300,000 for the Californian Law firm,Californian Strategies. The lawsuitwas filed on January 23 at the Sacramento County Superior Court by the California’s Growers Association just over three weekssince the birth of recreational marijuana sales in the California state. January 1st saw theinitial start of the experiment in the newly legalized recreational sales forrecreational marijuana.Thislawsuit comes after long-held dread that marijuana agriculture would becomeunder complete corporate reign. TheCalifornia Department of Food and Agriculture hold the responsibility ofissuing the licenses and they have declined to comment on the lawsuit.