If you thought opening a cannabis business in California was as simple as moving to the state, filing some paperwork, and opening up your very own dispensary… well, think again.
Although cannabis has been legal in California for quite some time, the Golden State still has a long way to go in terms of canna-business regulations. Medical cannabis (Proposition 215) has been legal since 1996, and recreational (Proposition 64) since 2016, yet cannabis businesses are still banned in two-thirds of California municipalities. Only 161 of the state’s 482 municipalities, and 24 of the 58 counties, allow any type of commercial cannabis activity.
Out of those few areas that do actually allow cannabis companies, many have imposed strict limitations on what type of business they’re willing to work with. For example, many cities don’t allow dispensaries but are willing to provide permits to testing labs. Other local jurisdictions allow medical cannabis businesses but not recreational ones.
What makes this even more hard-hitting, is that due to the many new regulations implemented post-legalization, a large percentage of cannabis business owners who had been operating in California’s confusing grey market for the last 20 or so years are being phased out of the new legal industry. Unfortunately, many are small companies, often family owned, so they may not have the means to relocate to a municipality that would provide them with a business license.
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They only choices they have are to shut down shop or continue running their companies illegally. This puts them at risk for expensive and possibly life-changing legal ramifications. However, this has opened the door for new companies to start off legitimately from the very beginning, without the legal stress that’s been clouding the industry for over two decades now.
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