Check Out These 5 things to watch for in California in 2022
After the legalization of marijuana in California five years ago, many sellers in the business are now at a breaking point. The industry itself is bringing to the state more money in taxes than any of the forecasts in 2016 could have predicted.
The industry is also getting stable, and as normalization continues, competition is expected well into 2022. Many new laws will kick in to help cannabis entrepreneurs and the patients that rely on medical marijuana.
Even with the growth of the legal cannabis industry in California, the illicit cannabis market remains twice as large as the regulated one.
For this reason, many cannabis operators who work with licenses are threatening to stop paying taxes if regulations are not made to fix the illicit trade. Corporations are also soaking up smaller businesses, and the window to make changes to the marijuana regulation is also closing.
Following are some of the main things you need to watch out for in the cannabis industry in California in 2022.
New Laws Kick In
About 30 cannabis bills were proposed in 2021, and about a dozen have already been signed into law. Most of the bills will be passed into law in 2022, including a law that will make it legal for cannabis drinks to be sold in glass bottles. The state will also be allowed to fine people up to $30,000 when caught abetting the illicit marijuana business.
One of the bills that were approved in 2021 provides a framework that will be used for the regulation of products that are made from industrial hemp. Hemp is a cannabis plant that is usually bred so that it does not contain any THC.
Products made from this cannot cause the consumer to get high and have also been proven to have other benefits such as easing inflammation, anxiety, and other ailments. However, the sector is not fully legalized as many regulations are causing problems for the businesses using CBD in different ways, such as including it in coffee drinks.
With the new bill, CBD can be legally sold as a dietary supplement, and it can also be an ingredient in drinks, foods, and pet foods that are being sold outside licensed marijuana shops.
This will only be allowed if the hemp producers are from the same state, and there is a deadline of 1 July that has been set for the Department of Cannabis Control to provide a fully detailed report on how this is going to be made possible.
The same law is also expected to end the ban on smokeable hemp, and hemp sales will be legal in the state of California once regulators have set up a tax in the new year.
Another bill was also signed to ensure that health care facilities are allowed to use medicinal cannabis for their terminally ill patients.
The law prohibits vaping or smoking cannabis but will allow for the use of beverages and edibles, capsules, and tinctures. However, the patient will be required to show a recommendation from the doctor.
Several grants are expected from the state to help more cannabis businesses to become licensed. Small farmers will also get the environmental remediation needed to support their sector.
Looming Industry Revolt
California's top cannabis business owners are also expected to form a coalition that withholds all tax payments. This will add up to roughly $1.3 billion and is a move that has been designed to ensure that regulators can improve the state system to ensure that licensed businesses can compete better against illicit sellers.
The illegal sellers, being unlicensed, can sell their products for much less, which means that buyers will often turn to them for their products. This means that the licensed businesses are unable to make profits and the fact that they pay taxes and are regulated means that the government is also losing more money due to this.
The taxes currently in place are also dependent on the product's weight, which means that the business owners have a more challenging time. Therefore, tax reforms are needed in California this year and are one of the changes that we can expect.
Consolidations to Continue
The industry is expected to experience more consolidations in 2022. the smaller businesses and industry players cannot make any profits based on the current landscape and operating conditions. As such, they are looking for corporations willing to buy them out, and the number of acquisitions and mergers is also expected to increase. Smaller sellers will also sell out to larger firms more in the year to come.
Federal Push
The cannabis industry in California could experience a jolt if there are federal law changes that could make it easier for the product to be sold at the national level. Under federal law, marijuana is still classified as a Schedule 1 narcotic and is considered on the same level as heroin.
This severely impacts businesses and consumers and restricts their access to many services. The MORE act is expected to tax cannabis across the entire country and decriminalize it, but it is yet to pass the senate.
The final push is expected this year since the democrats still have a bit of majority in Congress, and they have the power to turn the bill into law. Pressure is also being placed on the president to make good on the promises he made while on his campaign trail, such as expunging the records of people convicted of cannabis crimes and decriminalizing cannabis.
Cannabis at the State Fair
This is one of the positive things we should look forward to in 2022. In July, the first state-sanctioned competition will be held at the State Fair in Sacramento. The competition will judge cannabis cultivation and other things such as cheese, wine, olive oil, and craft beer.
California has been at the center stage of cannabis regulation and unregulated competition for years. Still, the changes that are in the pipeline are expected to make things much better for both sellers and consumers.
Get a MMJ card with licensed doctors in California
References
1. https://www.pressdemocrat.com/article/news/marijuana-5-things-to-watch-for-in-california-in-2022/
2. https://www.ocregister.com/2021/12/29/marijuana-5-things-to-watch-for-in-california-in-2022/
3. https://capitolweekly.net/californias-marijuana-market-heads-into-a-difficult-2022/
4. https://www.newsweek.com/these-six-states-are-embracing-marijuana-industry-new-laws-2022-1664382
5. https://www.forbes.com/sites/earlcarr/2021/12/31/cannabis-not-santa-is-coming-to-town/?sh=237017e30c14
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