When the clock struck midnight on Jan. 1, 2018, the state of California ushered in the era of legal recreational cannabis use, a long-awaited dream for many that became a reality roughly a year since the passing of Proposition 64.
The bill, which passed in November of 2016, largely decriminalized the substance and allowed for the commercial sale of marijuana products to patrons ages 21 and up. Patrons lined the streets outside of cannabis dispensaries across the state waiting to get their hands on the initial sales of the newly-legalized substance.
Berkeley Mayor Jesse Arreguin was present outside the Berkeley Patients Group awaiting the shop’s first sales of 2018.
“I’m stoked about this historic moment, not just for Berkeley, but for the state of California,” Arreguin stated. “This is a long time coming.”
As reported by the San Francisco Chronicle, the first patrons to purchase the legalized cannabis from the Berkeley dispensary were Mikki Norris, 65, and Chris Conrad, 64. The two, who are longtime advocates for the plant, purchased three joints while a crowd cheered.
“When we started, George Bush the first was president,” Norris said. “Zero tolerance was the policy of this country.”
“We waited a long time for this,” Conrad added.
In Santa Cruz, a dispensary hung a sign that read “Prohibition is Over!” while other cannabis stores across the state held ribbon-cutting ceremonies and other festivities, according to the Chicago Tribune.
While the majority of the state celebrated the breakthrough, a few notable cities remained ostracized from the big day.
Fresno and Riverside both outlawed recreational sales of the substance, while San Francisco and Los Angeles were unable to authorize state licenses to shops in time for New Year’s Day.
Another speed-bump likely to be encountered by cannabis entrepreneurs in California is the inability to store their profits in banks.
Forbes noted that the cannabis industry is expected to amass $5.2 billion in revenue, but due to marijuana’s classification as a “schedule one” substance, businesses will likely be unable to find any banks willing to store their money.
“Financial institutions need to go on record with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCen) when they establish a relationship with a known Marijuana Related Business, and (Matt) Karnes (an industry analyst) estimates that just 5% of all banks have done that,” Forbes contributor Julie Weed wrote. “He believes that fewer than 1% of all banks in the United States are currently working with cannabis related companies.”
The extremely small pool of banks willing to work with marijuana-related businesses leaves the majority of the industry dependent on cash-only transactions or cryptocurrency.
According to Weed, operating with cash-only “means they need to spend extra money on safes, video camera systems, security guards, and armored car pick-ups.” She added that “safety issues” can arise when an abundance of cash is stored in a known location.
Cryptocurrencies also pose a big risk to cannabis businesses because, as noted by Weed, cryptocurrencies such as Bitcoin “fluctuate in value,” making it “much less stable than regular currency.”
Although there are still roadblocks facing the cannabis industry in California, the significance of the substance’s legalization was not lost on its advocates.
“I feel like it’s been a struggle and a fight,” said Nicole Rice, a patron waiting for the doors to open at the Berkeley Patients Group. However, the 28-year-old added that voter persistence paid off.
“It’s historic,” she said.
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