Since Colorado legalized recreational marijuana in 2012, seven other states and the District of Columbia have followed suit. Next year, California, Maine, and Massachusetts will begin sales, potentially tripling the size of the legal pot market. By the end of 2018, 20 percent of Americans will live in a state where adults can legally buy and sell cannabis. Yet big problems remain unresolved, including a persistent black market that legalization was supposed to help undermine. There are also fights between states in favor of legalizing weed and localities that oppose it. And of course marijuana remains illegal under federal law, casting a shadow over the industry.
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State tax revenue from marijuana sales exceeds $1 billion. California alone anticipates another $1 billion in annual tax revenue from legalization. But with an impending January 2018 deadline to begin issuing permits, there are signs that growers and retailers may not join the state-regulated system. Hezekiah Allen, executive director of the California Growers Association, estimates that just 3,500 of 40,000 farmers have signed up for permits but says that’s primarily because local governments haven’t issued them or have banned marijuana businesses outright.
This creates problems for state regulators. “We have to work with over 500 different cities and counties over the state,” says Lori Ajax, chief of California’s Bureau of Cannabis Control. “For us to issue a license, we have to make sure it’s not in violation of a city or county ordinance, and because of our size, that’s a challenge.”
