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Inside California’s pot legalization failures: corporate influence, ignored warnings

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 Architects of the effort to legalize pot in California made big promises to voters.

But six years later, California’s legal weed industry is in disarray with flawed policies, legal loopholes and stiff regulations hampering longtime growers and sellers. Despite expectations that it would become a model for the rest of the country, the state has instead provided a cautionary tale of lofty intentions and unkept promises.

Compromises made to win political support for Proposition 64, the 2016 initiative to legalize cannabis, along with decisions made after it was approved by voters that year, unleashed a litany of problems that have undermined the state-sanctioned market.

At the root of the failure: an array of ambitious, sometimes conflicting goals.

California officials vowed to help small farmers thrive but also depended on the support of big cannabis operators backed by venture capital funding, who helped proponents of Proposition 64 raise $25 million and won a key concession after its approval. The result was a licensed recreational cannabis system that benefited large companies over smaller growers who are now being squeezed out of the market.

Siskiyou County marijuana task force members weigh cannabis plants
Members of the Siskiyou County marijuana task force weigh cannabis plants after cutting them down at an illicit grow in Mount Shasta Vista in 2021.(Brian van der Brug / Los Angeles Times)

The state set out to simultaneously cripple illegal operators and reduce marijuana-related criminal penalties to address racial injustices imposed by the long-running “war on drugs.” Far from reducing illegal weed, those efforts instead allowed the black market to flourish after legalization with the help of organized crime operations that run massive unlicensed farms and storefront dispensaries in plain view, bringing crime and terrorizing nearby residents. And those raided by police are often up and running again within weeks or days.

A sheriff's deputy carries two large brown bagsAn undercover Los Angeles County sheriff’s deputy loads two evidence bags into a van after raiding an illegal marijuana dispensary in Compton in 2018. Despite pot being legal in California, the black market dominates sales because of Proposition 64’s unintended consequences. (Jae C. Hong / Associated Press)

While making legal pot available across the state, officials created regulatory loopholes that allowed large swaths of California to ban marijuana sales. Though voters approved legalization, cities and counties have been skittish: Most rejected allowing cannabis businesses in their jurisdictions, resulting in only a fraction of the predicted number of licensed dispensaries operating.

A glut of cannabis produced by licensed and unlicensed farmers has driven down what small farmers can get for their crops, resulting in many facing financial ruin. Licensed businesses complain of stifling taxes and high overhead costs.

Many of the serious problems the state now faces were predicted seven years ago by a blue ribbon commission chaired by Gavin Newsom, then California’s lieutenant governor.

 Sebastian Segura, left, bud tender, assist Samanta Cubas, center, and Jonathan Quevedo, with marijuana products
A bud tender helps Samanta Cubas and Jonathan Quevedo with marijuana products at the Bonafide California cannabis dispensary in Maywood in July. (Gary Coronado / Los Angeles Times)

The commission urged restraint on taxing the legal market and limits on licensing to prevent big corporate interests from dominating the industry. The panel, which included law enforcement and civil liberties activists, also recommended robust enforcement, particularly against large illegal growing operations.

This is the story of how the promise of Proposition 64 went so wrong, and how the state’s grand vision proved so elusive.

It was a sweltering afternoon in 2015 when Newsom and other members of his blue ribbon commission faced hundreds of anxious cannabis growers and sellers inside the Redwood Playhouse, a small theater in Garberville.

The meeting was held a year before Californians would vote to legalize recreational cannabis, and pot farmers at the Humboldt County gathering gave the panel a preview of the potential problems to come.

Small-scale growers, including second-generation farmer Jonathan Baker, told Newsom they were worried about surviving under the state legalization plan.

“We just do not want to see our livelihoods stolen from us,” Baker said.

Newsom told the farmers that he was sympathetic to their plight and warned that deep-pocketed special interests were already at work in Sacramento.

To Read The Rest Of This Article By Patrick McGreevy on Los Angeles Times

Published: September 22, 2022

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