INDUSTRY BUZZ

Delays Impact Marijuana Industry

Licensing delays across the U.S. continue to financially impact the marijuana industry, from lost revenue to the entrepreneurial growers to missed tax dollars at the state level. Recent notes for several states, related to these license delays include:

• Alaska: Applicants for cannabis business licenses could be forced to wait up to five months for their paperwork to be reviewed – Alaska Journal of Commerce, 9/19/18
• Michigan: The state extended the medical marijuana licensing deadline from Sep 15 to Dec 15. Meanwhile another 98 facilities that have yet to submit their applications for facility licenses will be issued cease-and-desist letters – The Detroit News, 9/11/18.
• Ohio: The state of Ohio missed its planned medical marijuana program launch date of September 8, 2018. While 26 businesses in Ohio were chosen to cultivate, only four sites initially passed the state inspection process and allowed to grow. – 420 Intel, 9/10/2018 and Cannabiz media 9/27/18.
• Massachusets: Due to delays in licensing, actual collections of marijuana tax revenues may be off by $16 million. – WCVB5, 10/1/18.

Many reasons have been cited for these delays. Fingers have been pointed to staffing levels and bureaucracy at the Cannabis Control Commission as potential reasons for the slow rollout of retail sales in Massachusetts. Manpower issues have been blamed within the regulatory system in many states. Other delays largely hold business owners accountable due to construction delays or licenses being revoked due to non-compliance.

Regardless of fault, the monetary trickle-down effect is being adversely felt throughout the US cannabis community, from the nutrient manufacturer to the retailer to the grower to each legalized state. While Canada is experiencing its own set of issues related to the country’s legalization of marijuana, expect a compounded number of delays and lost opportunity costs as the US slowly legalizes . . . state-by-state.