As the new year comes in, it is important to take a look at what changes are to come to the cannabis industry. Although an adult-use cannabis market in California has been around for quite a long time, there are some changes to watch for in 2021. These new changes will hopefully progress the cannabis market in California. Our cannabis consultants in California at Quantum 9 explain how these new changes impact the state and nation.
The cannabis market in California succeeded through the pandemic. Cannabis is marked as an essential business within the state which allows retailers and suppliers to operate. With that, they are still able to make revenue in spite of the lockdown. Four major changes are to be made to marijuana businesses in California. Hopefully, these changes will allow the industry to continue its growth in 2021.
Good News for Small Cannabis Growers in California
Firstly, California plans on legalizing regional marketing in California. This means that cannabis growers have the right to promote marijuana grown in specific parts of the state with specific microclimates, soil composition, and elevations. Now, cannabis users in California can know where their products come from. This is appealing to tourists, also this sort of marketing is similar to the well-known wine industry in California.
However, only cannabis that is grown in the ground that uses soil from that region with no artificial light qualify for this kind of marketing. Although this change does not benefit all cannabis growers, small growers with undervalued products benefit immensely. So, if you are a small grower in California and need help with this new marketing initiative contact our cannabis consultants in California for more information.
Cannabis Reforms in California in 2021
Another exciting change to the cannabis market in California includes a push to lower taxes in 2021. Our cannabis consultants in California hope this initiative goes through as it will be a benefit to the consumer. This will also help alleviate some of the competition with the illicit un-taxed cannabis market.
Additionally, there are some changes to Prop. 65. For example, section AB 1872 suspends the California Department of Tax and Fee Administrations’ (CDTFA) power to raise the excise tax or adjust wholesale mark-up. Here are some important aspects of the section that is important for cannabis businesses and cannabis consultants in California to know:
- First, this change prohibits the CDTFA from adjusting the markup amount within the period beginning on or after the operative date of the bill.
- Secondly, it prohibits cultivation tax rates in 2021 from being adjusted for inflation. That is unless the adjustment is for an inflation rate that is less than zero.
- Also, this prohibits the Board of State and Community Corrections from making grants to local government that ban both indoor and outdoor commercial cannabis cultivation. This also includes the retail sale of cannabis products in California.
Also, some additional counties and cities in California approved legal cannabis programs in 2021. With that, we will see new businesses in 2021.
What’s Next For Cannabis in California?
Some expected trends for cannabis in California include expanded license opportunities throughout the state. A cannabis consultant in California can guide you through the licensing process in California. Additionally, there will be a continued maturation of products and user preferences. Lastly, we will see new legal banking and finance services within California.
Some industry insiders in California claim that cannabis companies will either merge or sell out in 2021. For example, some businesses grew too fast in 2019 which causes losses within the businesses. However, more growth for midsize operators appears as a possibility in 2021. With that, there will be a boost in sales within the regulated industry within the next couple of years. If you have an interest in the cannabis business, contact our California cannabis consultants at Quantum 9.