Is California’s Legal Marijuana Dispensary Industry at Risk of Collapsing?

California marijuana advocates warn that the state’s legal cannabis industry could collapse if steps aren’t taken to combat rising operating and regulatory costs.

In recent months, various state cannabis groups, from farmers to small business owners, have raised their concerns over what they believe is an increasingly unstable marketplace caused by a burgeoning illegal marijuana economy. 

In a letter penned this past December to Governor Gavin Newsom, state senate leader Toni Atkins, Speaker Anthony Rendon and executives from over 30 marijuana-related organizations called for action to help stem the growing influence of illegal dealers and growers. 

This letter comes after several years of complaints of high tax rates stifling the state’s marijuana industry and its small businesses.

“The opportunity to create a robust legal market has been squandered as a result of excessive taxation,” the authors write in their letter. “75 percent of cannabis in California is consumed in the illicit market and is untested and unsafe.”

In the letter, the authors advocate the need for policies, like tax cuts and expansion of retail access to cannabis, which will strengthen the legal marketplace and make it more competitive with the illegal economy.  

Further calls for change were heard at a rally outside the State Capitol this January, where cannabis advocates, small farmers, and business owners gathered to implore state leadership to revise the current marijuana tax structure. 

Speaking to reporters at the rally, Amber Senter, co-founder and executive director of Supernova Women, says that not only has California’s cannabis taxes impeded industry growth but they have also unnecessarily burdened minority communities who’ve been disproportionately affected. 

“Not only has the state fallen short in promises to right the wrongs inflicted upon Black and brown communities impacted by the war on drugs, but it has also perpetuated regressive war-on-drugs 2.0 policies through oppressive taxation,” said Senter. 

Governor Newsom has responded to these calls to action from those within the marijuana community and has promised to look into cannabis tax reform. While discussing his proposed state budget for the upcoming year, the governor said he planned to work with the legislative body to reshape current policy. 

“It is my goal to look at tax policy to stabilize the market. At the same time, it is also my goal to get these municipalities to wake up to the opportunities to get rid of the illegal market, the illicit market, and provide support in a regulatory framework for the legal market.”

Cannabis users can advocate for safe and legal marijuana by supporting their local marijuana dispensaries. Local dispensaries like Cornerstone Wellness are trustworthy sources for lab-tested, high-quality marijuana products that have been grown with care and consideration.  For more information about our world-class lineup, visit our marijuana dispensary, call us at (323) 259-8933 or contact us online. Our friendly and knowledgeable team will answer all of your questions to help you find the right cannabis product that best matches your preferences. Once you’ve discovered your preferences, you can take advantage of our convenient online ordering process.