I recently read the article "Here's Why Most California Cannabis Cultivators Don't Have Licenses", by William Sumner, that was pretty interesting. Sumner laid bare some of the big problems behind why small to mid-sized cultivators are not able to get licenses. I will briefly summarize the article, and recommend everyone to go read it here. Before I get into the article I would like to reiterate that Cannabis is a Schedule 1 substance under the Controlled Substance Act and as such it is illegal under federal law.
One reason that Sumner identifies as an obstruction in the licensing process for small to mid-sized cultivation is local policy. In California, 25 counties have decided to ban commercial activities related to cannabis, while only 13 have approved of commercial activities. This is more of an obvious reason to why cultivators may have more problems getting their licenses since there is a limited amount of counties they are allowed to operate in commercially. However, Sumner delves into some of the more less obvious reasons preventing these cultivators from obtaining their licenses like local zoning ordinances. Certain counties local zoning ordinances force cannabis industries into small business districts drastically increasing local real estate prices. This makes it difficult for these businesses to find a good location at a relatively decent price.
State policy is also mentioned in the article, stating that these small cultivators being barred from attending local farmers market will negatively impact them. Not allowing them to enter this kind of platform takes away one of the few viable options for small cultivators and retailers who like to interact with their clients.
Transportation, or distribution, is another huge problem because a majority of the companies with distribution licenses also have obtained another license. This causes the cannabis businesses without one to have to work with their competitors. This immediately makes it tough for small to mid-sized cannabis businesses to have a reliable way to ship out their product. Sometimes these small businesses cannot afford to pay the distribution fees, and completely leave their businesses destiny in the hand of another competitor.
Sumner talks about a couple other problems, but I encourage anyone to go read his full article as it raises some interesting concerns. Solutions will have to be made for these problems, but change is never fast. Patience will help solve some of these problems.