Nearly 150 marijuana companies in California warned on Friday that they could suffer crippling financial losses if the state does not renew a July 1 deadline and sets stringent standards for pot trials and packaging.
In a letter to Gov. Jerry Brown, United Cannabis Business Association said the changes would further unsettle the legal market launched on January 1, potentially forcing companies to close their doors.
The trade group representing cannabis companies said there are not enough labs for testing and retailers need to destroy huge quantities of unsold cannabis that do not meet the new standards.
Association President Jerred Kiloh estimates that companies could suffer losses of nearly $ 400 million if these unsold deliveries are destroyed.
"Forcing the industry to comply … will further paralyze the already-fighting regulated market," the letter said.
In a statement by the State Bureau of Cannabis, the control gave no indication to postpone the deadline.
"We issued our emergency regulations as early as November, and by that time we were pretty sure there would be a six-month transitional period for traders to consume their existing supply, and we felt that there was plenty of time to do so reduce existing stock levels and adapt to the new Californian rules, "agency spokesman Alex Traverso said in an email.
Legislation required six months after the extensive legalization of marijuana This pot, which will be sold after Saturday, meets strict quality standards. With the approaching date, retailers have unloaded unchecked inventory at bargain prices.
The rollout of the country's largest legal pot market was bumpy at best. The black market is still thriving and the industry complains about taxes, which can reach 50 percent in some areas. Others fear that a shortage of both adult and medical marijuana retailers could bring the supply chain to a standstill. 1
The change of rules was part of the state & # 39; The decision to give the industry a start at the beginning of the year. The shops were given six months to burn cannabis and edible food that was produced without stringent testing requirements.
Any marijuana that is harvested this year or offered for sale on July 1 must meet or be destroyed by quality and safety standards
The illustrated letter is an emerging industry struggling to gain a foothold.
The group said the 30 licensed laboratories testing the pot would be unable to meet demand, resulting in a shortage of shelves. A system to track plants from seed to sale has been delayed. And the packaging companies are not ready to comply with the new rules.
"Clients and patients will turn to illegal market retailers and delivery services who still have a wealth of products for sale Licensed retailers will be forced to close Letter wrote:
The companies and stakeholders that signed the letter For example, more than 3,300 cultivation licenses have been granted and there are more than 400 licensed retailers.
Associated Press author Brian Melley contributed to this report.
Blood is a member of AP's marijuana beat team, for full coverage of AP marijuana: https://apnews.com/tag/ LegalMarijuana