California will join the legal weed party on January 1 when recreational sales become official at the Golden State.
The state was one of four, including Nevada, which voted in 2016 to legalize the recreational use of marijuana. With sales projected to surpbad $ 5 billion once the market is put into operation, it is expected that the cannabis corner of California is by far the largest in the country.
The nascent Nevada market had such a hot start this summer by selling more than $ 85 million in recreational marijuana during the first three months of legal sales.
But having a great competitor nearby should not be a problem.
"It has not bothered me at all," said Ben Sillitoe, CEO of Cannabis Oasis in Las Vegas.
The launch of California won & # 39; It would be like the general bombing of Nevada when 44 stores across the state began selling recreational marijuana when it arrived midnight on July 1.
Only a handful of stores in California are expected to sell cannabis for adults on January 1. since many local governments are still working on the regulatory details.
As 2018 progresses, more stores in California will enter the mix, but Sillitoe said he does not see them as competitors, but rather as a way to help eliminate his staunchest competition: the black market of California.  The unregulated illegal market in California sold approximately $ 5.7 billion in a boat, according to a study by the Center for Agricultural Issues at the University of California. Sillitoe and other owners of dispensaries in the city say that part of that makes its way to Las Vegas.
Street vendors and illegal online delivery services sell many of the same products that Sillitoe sells at its store on Industrial Road near Statosphere. But unlike Sillitoe, they do not have a license and do not have to pay taxes to the state, so they can sell their products at a fraction of the price, he said.
But as California implements its regulated market and more stores come online, they are betting that it will start to choke that illegal supply chain.
"My hope is that the regulated market in California will stop the flow of illegal products that enter and reduce the supply of my competition", Sillitoe
The Northwest & # 39; border effect & # 39;
So far, there is only one case study to examine the impact, or lack of it, on the marijuana market of a state when a neighboring state launches its own legal sales.
Washington was one of the first two states to begin selling legal adult cannabis in 2014. Its southern neighbor, Oregon, launched recreational sales in October 2015.
Initially, the Oregon marijuana market cheaper did reduce sales in Washington, specifically in the counties on the border between the two states, where monthly sales fell to 47 percent in the three months after the start of the Oregon market.
But outside those counties, state sales and tax revenue from marijuana soared in Washington, a trend that has continued. Since October 2015, Washington has seen its duplicate monthly tax receipts from $ 14 million per month to $ 28 million in October of this year.
"I would not say it had much effect," said Mikhail Carpenter with Washington. Cannabis and Liquor Board.
Oregon and Washington also presented a unique dynamic that Nevada and California do not share. Mainly, the main population center of Oregon, Portland, is located right on the northern border of the state.
The closest comparison here would be the Lake Tahoe area, which has three marijuana dispensaries: a recreational dispensary at Incline Village and two medical dispensaries at Stateline.
It's a smaller sample than the case in Oregon and Washington, but examining what kind of impact these border communities have on the marijuana market is something the state will control, said Stephanie Klapstein, spokeswoman for the Nevada Department of Taxation. .  Klapstein said the Department of Taxation, which regulates cannabis in Nevada, has not conducted formal investigations into the possible impact of California's legalization, but plans to badyze a variety of impact areas once its market is opened and there is data available.
look at the market closely and start planning where we want to focus our research, "he said." Once the market opens in California, we'll have a better idea of other problems we'll have to examine. "
] The biggest threat
While the California cannabis market might not infringe the Silver State, another imminent threat could cause problems for the eight states that legalized recreational marijuana: the federal government.
marijuana remains illegal at the federal level, and last week US Attorney General Jeff Sessions hinted at a possible attack on the recreational pot 19659002] "It is my opinion that the use of marijuana is harmful, and we should not encourage it in any way, and represents a federal violation, which is in the law and is subject to be applied, "the sessions told reporters on Wednesday in Washington, DC" We are working to achieve a rational, but I do not want to suggest in any way that this department believes that marijuana is harmless and that people should not avoid it. t. "
Meanwhile, a law preventing the US Department of Justice from pursuing the state-regulated medical marijuana markets will expire in a matter of days.
That law, called the Rohrabacher-Blumenhauer amendment, prevents The Department of Justice will use federal funds to interfere with state medical marijuana programs or prosecute companies that comply with state laws.
That law expires on December 8, but it is a bipartisan group of more than 60 members of Congress , including Nevada Democrat Representatives Dina Titus and Jacky Rosen, sent a letter on Tuesday requesting party leaders in the House of Representatives and the Senate to keep those protections in place.
Contact Colton Lochhead at clochhead @ reviewjournal .com or 702-383-4638, follow @ColtonLochhead on Twitter.