California’s cannabis laws are a textbook example of what a state shouldn’t do. And one of the best examples of this is California’s distribution licenses. These licenses were unnecessary from the get go, and the recent developments have only made that reality more apparent. It’s time for the state to end distribution licensing and simplify its arcane cannabis laws once and for all.
What are distribution licenses?
Cannabis needs to get from one place to another. Rather than do the obvious thing and let cultivators drive it to manufacturers, for example, our state decided to create the concept of distribution licenses. It wouldn’t make economic sense for the state to create a class of licenses that are just glorified movers, so they decided to give distributors other jobs. They’d collect the cultivation tax from cultivators. They’d collect the excise tax from retailers. They’d remit those taxes to the California Department of Tax and Fee Administration and file periodic reports. They’d arrange for mandatory lab testing for cannabis goods. And they could do other things like store other licensees’ goods. Was this necessary? No. But it’s the system we got.
Early problems for distributors
Early on, many licensees got a separate
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