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California has a long history of marijuana propagation, usually illegal, but soon to become legal. Many families have been working in the illegal industry for decades and are now finding out that while they thought they could make the family business legal, they will be unable to due to a variety of restrictions.
Many of these families have been working to supply dispensaries with product for the last few years, however, with legal recreational marijuana shortly coming in to play, they will be unable to meet the demands on the highly regulated industry. What does this mean for these suppliers? Rather than risk their livelihood, many are contemplating returning to illegal business ventures and selling their product on the black market. However, both the legal and illegal markets in California are quickly becoming saturated with more product than consumers are/will be demanding.
Small businesses are crippled with the costs that it takes to become a legal supplier for the recreational market in order to meet safety qualifications, state regulations, etc. While the marijuana market is already oversaturated in California, the state is looking at what will become a shortage of regulated marijuana and an overabundance of black market product. As of this year, estimates put California as growing approximately 13.5 million pounds of marijuana a year but only consuming 2.5 million pounds. Where does all that excess marijuana go? To other states via the black market. One of the chief promises of marijuana legalization was that it would kill the black market and allow for safer, regulated product. In fact, it appears that in California, at least, marijuana legalization has had the opposite effect.