Marijuana has become just another business in California

The cannabis industry is valued between 7 and 10 billion dollars. Photo / AP

Jane Futcher and her wife, Erin Carney, were thrilled that California voters legalised marijuana in November 2016.

Their cannabis farm in Laytonville, California, would be completely compliant with the new laws, and they loved the sense of community that came with long-underground growers coming together and shaping a legal marketplace.

But by May, the couple had enough. Despite plowing nearly US$15,000 ($21,106) into making the farm where they grew medical marijuana with a county permit comply with new state and local rules for recreational use, they scrapped it all, frustrated with the layers of bureaucracy and seemingly endless government edicts.

"It seemed like everywhere we turned there was a new regulation that was making it difficult," Futcher said.

The drug will be legal for adults older than 21 in the state starting Monday. (Medical marijuana has been legal for years.) Along the way, an edgy, sexy industry has become beholden to reams of regulations and compliance issues - in other words, marijuana has become just another business in California, except that it remains illegal federally.

"It's like any other heavily regulated industry. Look at the pharmaceutical industry or the liquor industry. They're heavily, heavily regulated industries, and the cannabis industry is no different," said Cara Martinson, federal affairs manager for the California State Association of Counties. "It's a cultural shift, and that's what makes it interesting."

The change has not been easy, and some feel in limbo as the cannabis industry, which has been valued at between US$5 billion ($7b) and US$7b ($9.8b), starts to take form.

To be above board, businesses must comply with regulations from the state and the city or county where they operate. The state's rules were only released in mid-November. San Francisco and Los Angeles approved theirs in December.

Different types of marijuana sit on display at Harborside marijuana dispensary in Oakland. Photo / AP

Local rules and regulations vary widely across the state. In some places, marijuana remains completely banned. In others, it won't be legal immediately.

"On January 1, people are going to want to go out and buy cannabis," said Alex Traverso, spokesman for the California Bureau of Cannabis Control. "They're going to have to be patient in that not every place will be up and running."

Users won't be able to buy marijuana in San Francisco until Thursday. Many involved believe it will be several months before the market starts to settle and availability will become much more widespread. The regulations will, in many places, continue to be tweaked.

"We're building an airplane while we're flying it," said state Sen. Mike McGuire, a Democrat who represents the northern coastal region of California, where many marijuana farms are located.

Cities and counties have instituted different rules on where businesses can locate, what signs and security are required, and how many businesses are allowed in town.

In San Diego, which has fully embraced the marijuana business, facilities must be at least 1,000 feet from parks and child-care facilities. Neighbouring National City has banned all cannabis businesses. Los Angeles requires video surveillance of businesses.

But in some places, when business owners ask cities about their cannabis regulations, there are no answers.

"You get these very detailed questions from business operators that are way ahead of government on that and oftentimes you're like, 'hell, no one thought of that,' " said Joe Devlin, chief of cannabis policy and enforcement in Sacramento.

The state had just a few months to complete a monumental task: crafting regulations from scratch and merging into them an existing medical marijuana industry.

The regulations had to touch every aspect of the cannabis business, including farming, water use, shipping, retail and consumption, and required the construction of an online licensing system.

California has issued about 200 permits for a variety of uses, including retail stores. They will be good for 120 days, after which a permanent license must be obtained. The state said more than 1,185 licensing applications have been submitted.

There has been ample criticism of municipalities, some of which have not finalised the regulations needed for a marijuana business to open. They have been accused of dragging their feet or making it difficult for those looking to enter the business to figure out how to follow the rules.

"At the moment you have counties that have either outright banned, you have counties that have no clue, you have counties that have a clue," said David Hua, founder and chief executive of Meadow, a medical marijuana delivery service.

"I feel like I've just gotten a major in political science and all this other stuff that I had no intention of doing, but it's necessary," he said.

Adam Spiker of the Southern California Coalition, which advocates for the marijuana industry and has been working with cities and businesses ahead of legalisation, said there is concern that not all businesses will be able to afford the costs of the new rules and regulations.

There is worry that the system could fuel the black market that he said almost everyone wants to eradicate.

"My concern is that if we do not meet the demand for product on the regulated market it gives more folks incentives to be in the illicit market," he said.

A lighted sign advertises deals at Harborside marijuana dispensary in Oakland. Photo / AP

Los Angeles City Council President Herb Wesson said the city's system will make it easier to police illicit businesses. He believes Los Angeles will be able to accommodate the number of cannabis businesses it needs based on how the market bears out.

Small growers have been concerned that the law will open the state up to large-scale, industrial growing, the opposite of what brought many to the industry in the first place.

They are incensed that regulations they said were promised to limit the size of cannabis farms to one acre until 2023 were omitted from the final rules.

"California's traditional cannabis industry has been thrown under the bus, and California is about to roll out the red carpet for large corporations," said McGuire, the state senator.

He and Assemblyman Jim Wood, whose northern California district also includes a popular marijuana-growing area, are considering a legislative fix.

A spokesman for the state department of agriculture said a cap on businesses had not been proposed and the ballot measure does not allow for such limits.

There is also worry that wildfires that swept through some of the state's most fertile growing territory in October could hamper supply, and that the price of marijuana could greatly fluctuate because of taxes and additional layers of middlemen - and put less money in the pocket of farmers.

"People are really trying to unload stuff now. As of January 1 who knows what's going to happen," said Swami Chaitanya, a longtime grower in the state's "Emerald Triangle," three northern California counties that have long been considered America's epicenter of marijuana growing.

Chaitanya and his wife hand-delivered their last batch of marijuana to an Oakland dispensary on Friday. Starting Monday, the law will require a licensed transporter to deliver it.

He said there was a line of people down the block, waiting to buy medical marijuana before it is taxed at rates up to 45 percent after the law takes effect. Dispensaries stocked up on product in the last weeks of December, he said, because few growers will be licensed and there is concern they could run out of marijuana.

Chaitanya has obtained a local license, but many of the region's old-time growers have no interest in becoming legal and are thinking about getting out of growing altogether. Some will likely grow six plants or fewer, which is allowed under the law for personal consumption.

"We have this great irony of the people who moved up here because they didn't want to participate in capitalism. They didn't want to participate in the greater system, and they're being asked to jump into it headfirst, and that's not why they got into this," said Amanda Reiman, vice president of community relations at Flow Kana, which sources marijuana from small farmers.

Reiman and many others are bullish on legalisation. They said cannabis has been in the shadows too long, and they want to show that it is a mature, profitable industry that should be taken seriously and provide steady salaries and retirement benefits.

Margot Simpson, right, and Diana Gladden wait in line to purchase marijuana. Photo / AP

"I would love for folks to think about regulation as a way to stabilise the situation. That makes it safer for everyone and makes it so you can have a job in this industry and be ok," Reiman said.

But Futcher and Carney believe their community will now be bifurcated: those with permits and those without.

For the couple, getting into the medical marijuana business was a labor of love and a way to help the sick. Carney, a nurse who helped craft the state's midwife regulations, was active in the rulemaking process. The two attended countless meetings and connected with other growers.

"It felt like the little guys coming out of the closet," Futcher said.

"We were inspired," Carney added.

But then the regulations started to morph. At one point the couple learned they needed to create a parking lot - no one in the rural area has a parking lot, they argued - and build a separate, handicapped-accessible bathroom.

The final straw came when they were told they needed a commercial permit for the garage where they planned to dry the plant and workers' compensation insurance for a group of women who wanted to volunteer on their farm.

"I said, 'I can't keep throwing thousands of dollars at a moving target,'" Carney said. "It's not even possible for a small grower to make it work."

The women have decided to only grow the plants allowed without a license. Futcher, a writer, will continue the marijuana radio show she hosts on the local public radio station.

"It's life altering. It's our identity, the people that we hang with. It's our community, it's our neighbourhood, it's all of that and now we're not a part of it," said Carney. "If we can't be legal, who in the heck can?"