Most California Municipalities Ban Commercial Cannabis Activity
Two-thirds of California municipalities prohibit marijuana businesses from setting up shop, underscoring the hurdles MJ entrepreneurs face in trying to break into the world’s largest legal cannabis market.
Only 161 of California’s 482 municipalities and 24 of the 58 counties have opted to allow commercial cannabis activity of any sort, according to data from CannaRegs, a website that tracks local marijuana rule developments in the state.
In addition, many of those local jurisdictions are selective about the type of cannabis business they allow, such as testing labs only. Others permit medical marijuana companies but not recreational businesses.
In short, getting into the California market isn’t as simple as walking into San Francisco or Los Angeles and filing paperwork to start a marijuana store or grow.
The state remains a patchwork of regulations and rules, with most local jurisdictions choosing to implement their own regulatory schemes on top of state rules.
Part of the transition into a state-regulated system also means that tens of thousands of legacy operators who fueled California’s gray medical marijuana market for two decades have been shut out of the legal industry, either by local license caps or by city and county ordinances that ban their business models.
Many of those pioneers are small companies, often one-person operations, that don’t have the money to relocate to a city or county that will grant them permits to continue doing business in the legal marijuana sector.
This has led to enormous market contraction, while simultaneously opening business opportunities for newcomers to the industry down the road.