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Half of Jurisdictions in California Still Don’t Allow Cannabis Retail, Study Finds

Jun 26, 2020

Half of Jurisdictions in California Still Don’t Allow Cannabis Retail, Study Finds

Despite enacting full, state-wide legalization for recreational cannabis at the start of 2018, just over half California’s jurisdictions still don’t permit the retail of the drug.

In a new study of the state’s cannabis laws, researchers found that legal access to marijuana was still limited in California.


Legal but limited

Published in JAMA Network Open, the study identified and assessed the local cannabis laws of 534 of the 539 cities and counties that make up California.

The researchers found that 263 of these 534 jurisdictions (49 percent) allowed some form of retail sale of marijuana. These legal areas encompass roughly 57 percent of the state’s population.

Just 203 of the 534 jurisdictions allow the sale of recreational cannabis (38 percent). Of those, 122 allow storefront dispensaries and 81 allow sales only via delivery. Just over 50 more jurisdictions (257 of 534) allow medical sales.

Of the 147 jurisdictions allowing physical medical or recreational stores, 93 (63 percent) limit the number of such dispensaries on several grounds, including their proximity to schools. On average, these areas have just one cannabis store per 19,058 residents.

Somewhat surprisingly, the researchers found that cities were significantly less likely than counties to have legalized any form of marijuana retail. In total, 227 of the 476 city regions studied (48 percent) permitted cannabis sales, compared with 36 of the 58 rural counties studied (62 percent). Although the significant difference in the number of counties compared to the number of city regions could have an effect on these ratios.

The study’s authors also make clear that while 51 percent of jurisdictions ban all retail activity, state regulations still allows cannabis delivery anywhere in California.


Californian cannabis

As many in the industry have highlighted, the patchy nature of California’s legal cannabis system has helped keep the state’s illicit market afloat.

“The biggest problem that we’re experiencing California is the black market,” Aaron Riley, president of CannaSafe, a Los Angeles-based cannabis testing lab, told Analytical Cannabis this April. 

“The illicit market is five times as big and they typically do better even during times like this [amid the coronavirus pandemic].”

It’s been estimated that $8.7 billion of the total $12 billion made in California cannabis sales last year went to the illegal market.

The legal sector’s relatively high prices and its paucity of retail opportunities have largely borne the brunt of the blame.

Following the height of the state’s Covid-19 lockdown, legal cannabis sales do appear to be hitting a record high, though. According to the cannabis market research firm BDSA, the Friday sales seen in California increased with every passing week in May. Revenue was 40 percent above average on May 1, then up by 41 percent on May 8, up by 43 percent on May 15, and 66 percent higher than average on May 22.

But despite the retail pick-up, California Governor Gavin Newsom recently downgraded the projections for the state’s legal cannabis tax revenue for this year and the next.

In the two years since legalizing recreational use, California has raised $1.03 billion from cannabis excise, cultivation, and business taxes.

 

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