California’s medical marijuana industry is facing a great deal of uncertainty, as evidenced by two developments in the state last week.
First, a City Council committee advanced a measure that would ban all dispensaries in Los Angeles, which currently is home to the largest number of medical marijuana centers in the country. (The committee also supported a separate bill that would allow roughly 100 dispensaries to remain open but force all others to close.)
Less than 48 hours later, state lawmakers advanced a bill that would create a government body to oversee the medical marijuana industry across California.
These measures, if passed, could have a huge impact on MMJ businesses in the state. The ban in LA would be devastating, of course, as it would essentially destroy the biggest medical marijuana market in the United States. The statewide regulations, on the other hand, would be beneficial – bolstering the industry’s credibility and helping rid California of shady operators that have ruined its image. But they would also be disruptive, requiring existing businesses to meet certain criteria and likely shell out thousands of dollars in the process.
As a business owner, it’s hard – if not impossible – to prepare for the future given these uncertainties. The best strategy is to try to remain as flexible as possible so that you can react quickly to change. That means you should shelve any expansion plans and think twice about any big expenditures, as you might need that cash to meet new regulations. And if you run an MMJ business in Los Angeles, it’s probably wise to have a personal backup plan in case you are forced to close.
The other big story during the shortened holiday week revolved around cannabidiol, or CBD. Colorado-based Dixie Elixirs & Edibles announced last week the launch of its new line of hemp-based CBD products. The company says these products are legal in the U.S. and can therefore be sold in any state. This represents a promising new market for MMJ companies willing to invest in CBD and could present a host of new opportunities without all the risk.