Marijuana Business Factbook 2019

47 © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. State-By-State: Legal Overview, Market Data and Outlook | Chapter 2 MJBIZDAILY.COM SUMMARY What to watch in 2020 Regulators are still working to stabilize California’s cannabis industry―particularly its adult-use market. Fewer than half the municipalities in the state have opted to allow commercial cannabis activity of any kind, meaning many areas do not have access to recreational marijuana stores. And where licensed rec stores do exist, many are struggling to compete against unlicensed, illicit-market operators. A plan unveiled by California Gov. Gavin Newsom’s administration to reduce the tax-collection burden on the state’s cannabis industry and simplify the tax-collection process has been praised by advocates and businesses alike, though the changes will need to make it through the 2020 legislative session. Marijuana Business Opportunity Rank for 2020 A- Despite the messy transition to a regulated environment, the vast market potential in California―both immediate and longer term―should not be overlooked. With no statewide caps on licenses and many different license types to choose from, opportunities abound throughout the state’s cannabis supply chain. Furthermore, additional municipalities and counties likely will opt to issue licenses as the state warms to the industry overall. Some segments will have more intense competition than others, such as cultivation, infused product manufacturing and retail, but opportunities also exist in areas such as testing labs, white label manufacturing, packaging and distribution. However, cannabis tax reform―which will be debated in the 2020 legislative session―needs to happen in order to diminish the significant illicit-market presence in the state.