Making legal cannabis work

Legalization, 15 months in.

In January 2018, Proposition 64 took effect and adult use and sales of cannabis became legal. While perhaps a historic moment, it was only the start of the process for legalizing and regulating a multibillion-dollar industry.

Sacramento, like most communities in California, had a cannabis economy prior to legalization and today, 15 months after legalization, we are still moving through the process of transitioning the industry into a legal framework intended to protect consumer safety and increase public safety.

Overall, Sacramento’s pragmatic approach to managing cannabis has largely been successful. We have established a comprehensive framework to regulate each part of the industry and created a functioning marketplace that supports the transition of the cannabis industry, while also implementing enforcement strategies to reduce the illicit market.

As a result, Sacramento has fewer illegal operators compared to many other cities, while the legal industry has sparked dozens of new companies, created more than 1,000 new jobs and this year will pay more than $7 million in taxes to the city’s General Fund.

The transition, however, will also require an honest and ongoing dialogue about what the people of Sacramento and California ultimately want cannabis in their community to look like.

While each city will answer this question differently, each must be honest and cannot ignore the realities made clear by the failed policies of the past. We must accept that prohibitions of cannabis failed and that regulation and legalization will require functioning marketplaces. Consumers must have access to the legal marketplace and governments must be restrained in their temptation to overtax the industry. The legal market does not operate in a vacuum, but rather competes directly with the illicit market.

When evaluating where we are in the process of legalization, context is important. We need to remember cannabis was illegal for more than 100 years. Changing cultural norms and incremental policy change, notably Proposition 215 in 1996 that legalized medical marijuana, created conditions that allowed for the emergence of a cannabis industry.

By the time legalization occurred, California’s cannabis industry had grown into a dynamic and multifaceted multibillion-dollar industry. The state and local governments faced a monumental, never-attempted task of developing and applying a regulatory structure to the world’s largest cannabis economy.

The general state of cannabis in California and in Sacramento is far from perfect and the transition is far from complete. Legalization and the transition into the legal marketplace will likely take several more years. Significant issues related to expiring state licenses, testing lab standardization, packaging, waste, “track and trace” and taxation loom in the background and threaten the stability of the legal market.

Despite the complexity and imperfections, the success over the last two years is reason to be confident that the daunting task of regulating this industry will be accomplished.

Sacramento was one of the first cities in California to take on the task of regulating cannabis. Without a road map we created a pragmatic and thoughtful approach that has been successful in reducing the illicit market while creating economic benefit for our city.

While the next few years will be turbulent, the foundation we have set will allow for the refinement of a cannabis industry that will create jobs, generate tax revenue and increase public safety.