Weekly Wrap-Up: 100s of California Dispensaries to Close? + Final Marijuana Regulations in Colorado

If it isn’t one thing for California’s medical marijuana industry, it’s another.

The MMJ business climate in the state is as turbulent as it gets, with dispensaries and related businesses under assault on many fronts and facing life-threatening challenges on a routine basis.

Last week was a particularly brutal one for California’s medical marijuana community.

On Monday, the state’s Supreme Court weighed in on a closely watched case, ruling that cities and towns can ban marijuana dispensaries.

The decision upholds the roughly 200 bans in place across the state and will pave the way for more cities to outlaw dispensaires. Several towns that had instituted bans but were not enforcing them pending the Supreme Court decision responded immediately, sending out letters telling dispensaries to close down. Other towns indicated that they will move forward in implementing bans. As a result, hundreds of dispensaries could close across the state.

And that’s just the tip of the iceberg for California’s medical marijuana industry.

As MMJ Business Daily reported last week, federal and local officials have resumed their crackdown on the state’s medical marijuana industry, initiating raids and sending out civil forfeiture notices in a bid to shut down dispensaries and put pressure on the industry in general. These actions could force dozens of additional dispensaries out of business in the coming weeks.

And then there’s the tenuous situation in Los Angeles, where voters are set to decide the fate of the city’s estimated 700 dispensaries during next week’s local elections. One proposal on the ballot would force most of those centers to close, allowing just 135 to remain in business. That would greatly alter the medical cannabis business landscape in what is currently the largest single MMJ market. Tens of millions of dollars in industry revenue could evaporate if current patients/users revert to the black market given the lack of access.

Expect the turbulence to continue until California lawmakers finally buck up and adopt statewide regulations on the medical marijuana industry.

Also last week, Colorado legislators completed the Herculean task of crafting regulations on the new adult-use marijuana industry in a very short period of time, becoming the first state in the nation to do so. Getting your arms around all the rules is difficult, as the main regulatory bill is 73 pages long and is filled with confusing and vague language (here’s an overview of the 20 most important aspects of the regulations for entrepreneurs). So expect a lot of confusion – and, hopefully, clarifications – going forward.

The regulations are far from perfect. In fact, there are several very concerning aspects of the rules, which one would expect given the situation. Nonetheless, the fact that Colorado has now adopted a basic framework for its recreational marijuana industry puts the state on the fast track to launching retail cannabis stores.

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