California Dispensaries Forced to Destroy Up to $350 Million Worth of Cannabis...

California Dispensaries Forced to Destroy Up to $350 Million Worth of Cannabis Products

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We’ve seen the positives that come as a result of cannabis legalization – responsible consumers no longer facing criminal charges, a boost in state and local economies, job creation, etc. Unfortunately, along with those positives often come some negatives as a result of heavy regulation. Recently, some California dispensary owners, distributors and other industry professionals were hit with some depressingly negative news.

Recreational cannabis has been legal in the state of California since the beginning of this year. For the first half of 2018, the state government has permitted businesses to sell products that were not compliant with the new testing standards and packaging codes, in order for them to have enough time to implement the proper changes. All of that has changed this month, and the remaining edibles, oils, flower and other products still on shelves that are not up to code will have to be destroyed.

Dispensaries and retail locations have had to destroy their own products in order to comply with state regulations, and take video of them doing so, ensuring that state officials can’t penalize them in the future. Flower and pre-rolls that don’t pass code will be ‘composted’ – or locked away in a dirty bin – and oil cartridges will have to be destroyed with a hammer.    

The United Cannabis Business Alliance estimates that loss from the products that must be destroyed could be more than $350 million. Some industry professionals say the main cause of this huge loss is that there simply are not enough labs to test products to ensure compliance.

“We just don’t have enough labs,” said David Hua, CEO of Meadow, an online purchasing platform. “A lot of the brands we know may not get through in time to get on shelves.”

State officials claim that they are doing the best they can, but that they are being ‘cautiously optimistic’.

“There are 31 licensed testing labs throughout the state. “We’d obviously love to have more, but I think we’re cautiously optimistic,” Alex Traverso, spokesman for the state bureau of cannabis control, wrote in an email.

Depending on what niche a business happens to operate in; some industry professionals welcome the changes, while others do not. The California Growers Association sees the changes as a good thing, saying that they will no longer be “competing with growers who cut corners and sell dirty product”.

The new regulations showcase an issue that many cannabis businesses face. They want to follow all laws and regulations, but still have to compete against the unlicensed that can sell their product at a much lower rate. Some industry experts estimate that up to 80% of the cannabis market is unlicensed transactions.

We are all for a legitimized legal cannabis industry that offers consumers consistency and standards in every product they buy, but there has to be a better way than destroying that much product.

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