First Impressions From California’s Commercial Cannabis Rollout

First Impressions From California’s Commercial Cannabis Rollout

California's commercial cannabis rollout was the big New Year's marijuana headline. How did it go, and what have we learned so far?

Imagine, after many years of anticipation, you finally receive an invitation to that big party. You’ve been dressed up and ready to go for as long as you can remember. In the interim, you’ve been pregaming, or perhaps pre-celebrating. Then, hey — you discover this invite isn’t for tonight at all. It’s for next week. Is it time to celebrate, or time to just go about your business as usual?

If some of the joy and magic of California’s rollout of commercial adult-use cannabis sales feels muted, and more like a somewhat-momentous, mostly functional trip to the store, it’s partially due to this pattern of long, drawn-out anticipation and irregular, somewhat anticlimactic fulfillment.

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The first sales of recreational marijuana in California were Jan. 1 — four years after people lined up in the freezing cold and snow in Colorado in order to be the first-first — but this was a limited-engagement fete. Sales weren’t at every dispensary, and not in every city.

Though a few San Francisco dispensaries went live on Jan. 6 after sales began in Berkeley and Oakland across the Bay, Los Angeles is still dark. Now, one-by-one, a few more “grand openings” are trickling out, as soon as dispensaries receive the green light from state bureaucrats and print out the permit. How many “first day” parties can you possibly expect to greet with the same enthusiasm?

As it turns out—quite a few.

Legal marijuana is really popular — and cannabis consumers don’t care about being up early, or first in line

You hate to fuel a stereotype, but…legal marijuana consumers are either relaxed enough to feel no sense of urgency, or they have plenty to do in the morning before hitting the dispensary. Or perhaps, as the Sacramento Bee opined, after capital-era dispensaries opened their doors to a few die-hards and some crickets, “Californians are too cool to line up for weed.” As usual, the truth is somewhere in between.

While “hundreds” lined up outside Oakland’s Harborside in the predawn dark and cold on Jan. 1, in San Francisco, just a handful of people were queued up outside The Green Cross and The Apothecarium when they opened at 8 and 9 a.m. on Jan. 6, respectively. But then — more came. And more. And more. By lunchtime, lines were stretching longer and longer. At Green Cross, “85 percent” of visitors were new customers. All this long, drawn-out exposition has translated into less need to “be the first,” but there’s no denying legal cannabis is a popular draw. In a state that’s been saturated with marijuana for decades, in a marketplace some feared was already full — “everybody who needs or wants weed already has some” was a common line — there’s still ample room for excitement and novelty. That exhale you just heard was a sigh of relief from entrepreneurs.

Legal marijuana is really, really, really expensive. Maybe too expensive

There’s just no getting around it. Legal commercial-grade California cannabis is not cheap — just as business leaders and analyst warned us. On Jan. 1, one fellow forked over $100 for four-and-half grams, a price point that could have brought home a half-ounce less than a month prior at The Emerald Cup.

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Such is the cost of going legit. State and local sales taxes, excises taxes, and cultivation taxes add an estimated 40 percent to the cost of legal marijuana. This means $70 eighths and $500 ounces — before sales tax — are common sights, even as California is supposedly drowning in a biblical oversupply. (Not all of that cannabis is ready for the legitimate market, you see.)

The fear is that legal cannabis will price low-income people, especially sick patients, out of the legal market and drive them back to “their guy” on the street. That may happen, but be honest: Most of us would rather pay more for the convenience and assurance of going to a store rather than deal with all that.

Everybody is going to try to make money off of this — everybody

Hustlers built what we’ve come to know as modern-day California. Their legacy is still with us. The Gold Rush-era companies still in business made their first mint marketing gear to minors. Their spirit is alive if not eye-rollingly stale in Jack-in-the-Box’s very creative $4.20 “Munchie Meals,” a promotion hatched with Snoop Dogg’s Merry Jane lifestyle brand.

Other big corporate types that may have disavowed or eschewed any connection to scary, illegal cannabis will follow suit in their quest to make an ancillary buck off of California’s estimated $7 billion pot market. Isn’t it funny how quickly something can be mainstreamed when there’s money involved? O.G.s will note, accurately, that weed hucksterism isn’t exactly new — it’s just migrating from cheap Venice Beach kitsch to slick Madison Avenue machines.

We are drowning in plastic

When sales went live on Jan. 1, a bevy of new rules went into effect along with them. Among them is a requirement for all cannabis to be put into a child-proof container. Dispensaries already had stocks of glass jars, pill bottles, plastic bags, and other containers ready to go — how do you lock those up, exactly? The “solution” has been to put everything into an opaque, “child-proof,” harder-than-normal to open plastic bag — and we mean everything, from single-serving edibles and modest grams to large purchases.

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Times like these are when California regrettably descends into self-parody. We can see the logic of keeping edibles away from children, but as many others have noted, alcohol and cigarettes aren’t held to the same standards — and raw marijuana, remember, has very little THC. Dispensaries and brands are working on integrating child-proofness into their supply chains, but until then, be prepared for this polyethylene silliness.

 

This is prologue. Everything is moving fast, and everything could change again

A few days after legal sales began Jan. 1, a Sacramento-based cannabis compliance company committed a legendary self-own, advertising a party that did not comply with state law. But really, they should be forgiven. Life (and rules) are coming out fast and hard. The state managed to come up with “emergency” regulations only six weeks before the big day. If you didn’t like them, good for you: non-emergency rules will be “finalized” sometime in the next few months. Anyone expecting that to be the final-final is fooling themselves. Haggling over taxes, regulations, packaging, testing will take years.

Speaking of testing: Cannabis purity requirements haven’t even come into effect yet, and won’t until the summer! In other words, the market has a few disruptions yet to come, and those are the ones we know about. To return to the metaphor and bash it to bits, this party is still barely in the cocktail and hors d'oeuvres stage.