California dispensaries were approaching panic mode over the weekend. In anticipation of strict new regulations, shops throughout the state were trying to move old product as quickly as possible. Many of them launched “fire sales,” slashing prices before new regulations rolled out on July 1.
“Fire Sales” In California Dispensaries
According to dispensaries from California, weed shops throughout the state held what many were calling fire sales. These sales featured dramatically reduced prices on pretty much everything.
In fact, weed consumers in The Golden State enjoyed lower prices last weekend than they’ll probably see for years. The reason for this sudden drop in retail weed prices: new regulations in California’s legal cannabis industry.
In particular, California is now requiring that all cannabis and cannabis products sold in a dispensary must pass a new and much stricter set of quality controls.
But these new rules also mean that all the weed products grown, processed, and manufactured under the old rules will no longer qualify for retail. This is what put dispensary owners in a bind.
Stuck with tons of inventory that was about to become obsolete, shops around the state looked for ways to get rid of it all. So, many decided to cut prices and try to move as much of it off their shelves as possible.
At this point, it’s unclear exactly how much revenue California dispensaries lost due to the dramatic cut in retail prices. But industry experts have been fearing that California’s new changes could present financial challenges to businesses.
California Dispensaries Suffer Crippling Losses From New Regulations
California’s new regulations are at the heart of everything. These new regulations were scheduled to go into effect July 1.
Additionally, California will begin enforcing a much stricter set of lab testing requirements. In particular, the state will require a higher standard when it comes to pesticides and other chemicals used in the production process.
The changes have been controversial among many industry players. In particular, the United Cannabis Business Association (UCBA) wrote a letter to California Governor Jerry Brown.
In it, they voiced concern that the changes were coming too quickly and that the fast timeline would place too much pressure on the legal industry. Ultimately, the letter asked the Governor to delay implementation of the new regulations.
The UCBA argued that putting the new rule change into place on July 1 would create a number of problems. The organization claimed there would not be enough lab time to complete all new tests.
As a result, they said this could lead to a bottleneck in supply, which could translate into shortages for consumers.
Particularly relevant to last weekend, the UCBA was concerned that the July 1 deadline would force companies to get rid of any product that doesn’t satisfy new requirements.
“Licensed retailers will have to destroy any remaining inventory that hasn’t been sold prior to July 1, 2018, causing an economic hardship for the retailers who still have product that complies with the Transitional Period requirements,” the UCBA’s letter said.