How California Cannabis Industry Changes Will Impact Business This Year


Since the passage of the Adult Use of Marijuana Act (AUMA), California's nascent legal marijuana industry has been learning how to exist as a legitimate enterprise. Being first often means blazing a trail for others to follow, and this is what many cannabis entrepreneurs are doing for the next generation of industry business owners.

State Changes Business Owners Should Look For in 2021

Legal and regulatory changes impact highly regulated businesses more significantly than typical industries. Simple processes like transporting inventory between two states can be complicated for dispensary owners. Did you know it’s illegal to transport cannabis between two states – even if both states have passed marijuana legalization laws? Because marijuana is still against federal law, activities like interstate travel, whether by car or plane, are even more challenging for cannabis business owners. When your business lives and dies by regulation, like cannabis dispensaries, you have to watch for industry trends.

New business owners have faced many challenges and will continue to as local, state, and federal governments work to establish systems for the growing legal recreational drug market.

Here are a few examples of changes impacting 2021:

  • Streamlined Oversight: California announced at the beginning of last year it would start working to combine the three cannabis regulatory agencies into one oversight entity. Pandemic-related issues likely slowed down the process, but we're sure to be hearing more about this soon. The future Department of Cannabis Control is scheduled for creation in July of this year.
  • Regulation Enforcement: Since the passage of the AUMA, California regulators have been working to develop systems and policies to facilitate the legalization of marijuana in the state. Most cannabis business owners were expecting greater enforcement by 2020, but the pandemic slowed large-scale enforcement. However, the Bureau of Cannabis Control (BCC) did file enforcement lawsuits towards the end of last year for unlicensed operation, so it looks like BCC and related agencies are gearing up for a very active 2021.
  • Hemp & CBD Legislation, Changes, and Plans: There have been a few attempts to pass CBD legislation in the state, but all have failed, including the most recent attempt, AB-2028. California also introduced a hemp production plan that should be approved in 2021. Hemp-derived CBD is not legal in California for use in any edible form or dietary supplement. It's expected that legislators will take another pass at CBD legalization this year.

The cannabis industry saw a surge in revenue and customer engagement during the pandemic lockdowns. State leadership classified dispensaries as essential businesses, and delivery technology helped create windows of opportunity to grow business in an unpredicted moment.

Your San Diego Cannabis Business Attorney

At Purdy and Bailey, we understand the challenges facing our cannabis business clients. The year that was 2020 may serve to legitimize the legal marijuana industry. With 2021 forecasted to be just as productive and busy, cannabis business owners need to watch for changes to the industry. Contact our attorneys If you need to discuss the details of your case with a professional. Call us now at (858) 360-7080 for more information about how we can help.

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