Marijuana Business Magazine April 2019

Israel wanting us to set them up with meetings with cannabis operators in California because they’re interested in investing,” Drayton said. “So, they’re playing into the money game and the consolidation of the industry that’s naturally happening anyway.” That’s because California doesn’t have a residency requirement of any kind for ownership stakes in marijuana companies, and it also allows outside investor participation in the industry. What that’s leading to is something that Anderson particularly fears: a complete turnover of L.A.’s cannabis industry ownership. “That’s what we’re trying to stop from happening,” he said. “That’s what I’m fighting with them about. Do not force out the people who have been hit in the raids and put in jail and paid their dues, in favor of some corporate person who doesn’t give a damn about what people have been through.” While that may provide an opportu- nity for outside companies to jump into the California market, it may very well come at the expense of locals such as Anderson who have poured their hearts and souls into the L.A. mari- juana trade and reformmovement. However, in the long term, much of that market consolidation and corporate control will happen anyway, just because of market economics and the power of large companies to dominate basically any industry, said Avis Bulbulyan, the CEO of L.A.-based Siva Enterprises. Big Players Coming In “I think you’re going to see a lot of failure” in 2019, Bulbulyan predicted. “At some point, you are going to see the bigger companies coming in. …They’re going to come in and consolidate. If you were to give a license to all the applicants right now, all the existing operators, probably 80% of them are not going to be in business in two years. “But at least give them a chance.” Drayton said consolidation is already taking place, but he’s hopeful some of the California bootstrappers can still be saved. “We’re seeing big money starting to take over,” Drayton said. “If we don’t put safeguards in place—if we don’t open up the doors to smaller operators to create licenses, to create pathways to compliance—the result is going to be an entire consolidation of the industry.” John Schroyer is a senior reporter at Marijuana Business Daily based in Sacramento, California. Reach him at johns@mjbizdaily.com .