Dispensaries Brace For Growing Pains In California Pot Industry

LOS ANGELES (CBSLA.com) — As California prepares for the legal sale of recreational marijuana, tension is growing between the state and the Trump Administration.

Like many in the California cannabis industry, marijuana dispensary owner Aaron Justis is preparing for a massive influx of new customers.

Currently, Justis can only sell pot for medical use at his Buds & Roses dispensary. But because of Proposition 64, on Jan. 1, the state will begin accepting applications for businesses to sell marijuana for recreation.

“There’s going to be a whole new consumer base we want to ease into it,” said Justis. “Definitely excited. Been waiting a long time for this.”

The outcome still remains unclear, since California has yet to set any regulations for the industry.

Attorney Aaron Lachant, who represents several Los Angeles dispensaries, says one of the biggest concerns right now is the federal government. White House Press Secretary Sean Spicer recently hinted at a possible federal crackdown of anti-marijuana laws.

U.S. Attorney General Jeff Sessions also said that his “best view is we don’t need to be legalizing marijuana.”

“Everyone is holding their breath right now, because folks have been waiting for years for these regulations to come out,” said Lachant.

The comments from the Trump Administration have sparked alarm in California, where state lawmakers recently proposed a bill to declare California a sanctuary state from federal marijuana enforcement, similar to sanctuary cities that do not assist in the enforcement of federal immigration laws.

But Lachant warns the bill could also backfire because it would be harder to go after businesses not following state laws.

“It’s a catch 22,” says Lachant. “One hand, it’s good for the legal folks and it shows deference to the will of the voters. On the other hand, it’ll make it that much harder to shut down the bad guys.”

Another major unresolved issue: banking.

Because marijuana is still not legal under federal law, most banks won’t touch any pot proceeds. So that means the multibillion-dollar cannabis industry is conducted entirely in cash.

Janice Hardoon, the owner of Koreatown Collective, says with California now entering the recreational market, the banking problem will be magnified.

No banks means no small-business loans or official records to build credit and a financial identity.

Plus, Hardoon also warns that where there’s cash, there’s crime.

“It’s a big headache; it needs to be addressed,” she said. “Everybody wants to eat from the plate of the cannabis industry. Somebody’s going to have to bend.”

As for Justis, he plans to expand to double the number of employees with or without the federal government’s blessing.

“I’m definitely focused on business and staying competitive,” he added.

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