But with the birth of a new legal industry also came a new maze of bureaucracy. California’s many layers of government also wanted a share of the newly flowing cash. The 2016 legalization initiative gave local governments nearly total control over regulations, which allowed politicians at both the city and county level to restrict how many licenses were allowed in their communities. They could also require hundreds of thousands of dollars in licensing fees, a trend that one industry blog called “
extortionate” in 2019. In some cases, California’s local pot laws allowed politicians to engage in outright
criminal corruption, as Politico reported in detail in 2020.
In short, lawmakers across the state saw the new industry as a “cash cow that needed to be milked,” according to Dennis Bozanich, who worked as a cannabis regulator in Santa Barbara (he was once deemed the “cannabis czar” by a local paper) during the first years of legalization. He now runs his own consulting practice for government affairs.
“I think everybody got greedy,” Bozanich told SFGATE, referring to both private companies that expanded too fast and government officials who
created expensive regulations.
When sales first opened in 2018, things looked strong. A multibillion dollar pot market grew from nothing in a matter of months. The COVID-19 pandemic gave the market an additional boost in 2020 and 2021, when consumers across the West Coast
spent more money on pot as they were stuck at home during pandemic lockdowns.
But the growth didn’t last long. California’s pot sales peaked in early 2021 and have since been coasting at a
lethargic and slightly downward trajectory, with overall sales much lower than the estimates from pre-legalization had predicted. For the thousands of new pot business owners who invested heavily on the assumption their businesses would grow quickly — and keep growing for years — that spelled disaster. By the end of 2021, California was offering not a money-printing machine, but an overinvested market with nowhere near enough people buying pot.
Now, midway through 2024, thousands of pot companies have gone out of business, from the state’s biggest players like
MedMen and
Herbl to small family-run companies like Skibola’s Cosmic View. She decided to shut down her business this past April.