California’s legal marijuana market changed significantly on July 1, 2018, when new testing regulations took effect. Dispensaries across the state had noncompliant inventory that they would not be able to sell after that date, so prices were marked down significantly. Now that new testing procedures are in place, the price of legal marijuana has increased, and there are reports that sales are down and that users may be turning to the black market.

According to the announcement issued by California’s Bureau of Cannabis Control:

“Beginning July 1, 2018, a licensee may only sell cannabis goods that have been tested by a licensed testing laboratory and have passed all statutory and regulatory testing requirements. Untested cannabis goods cannot be sold by a retailer and must be destroyed…..In order to be sold, cannabis goods harvested or manufactured prior to January 1, 2018, must be tested by a licensed testing laboratory and must comply with all testing requirements in section 5715 of the Bureau’s regulations. For testing purposes, the date the laboratory collects the representative sample is used as the harvested or manufactured date for pre-January 1, 2018 cannabis goods. Cannabis goods that fully comply with the testing requirements in section 5715 of the Bureau’s regulations are not required to be tested again.”

Section 5715 requires that “Cannabis and cannabis products” be tested for moisture content, residual solvents and processing chemicals, residual pesticides, two categories of microbial impurities, homogeneity of edibles, foreign material, terpenoids, mycotoxins, heavy metals, and water activity in solid or semi-solid edibles.

New products must not only be more rigorously tested but also more carefully labelled. Regarding labels, the new rules state:

“A retailer shall not accept cannabis goods that are not properly packaged and labeled. A retailer shall not package or label cannabis goods, even if the cannabis goods were in inventory before July 1, 2018. However, for medicinal sales, retailers will place a sticker on cannabis goods stating, ‘FOR MEDICAL USE ONLY’ upon sale to a qualified medicinal consumer, unless the statement is already printed on the package. Exit packaging is not required to be child-resistant and can no longer be used to satisfy the child-resistant packaging requirements. All cannabis goods must be in child-resistant packaging prior to delivery to a retailer.”

Two examples of products being sold at cut prices at a dispensary in California.

The new rules also put limits on the amount of THC per serving of edibles. They are: “Non-edible cannabis products shall not contain more than 1,000 milligrams of THC per package if intended for sale only in the adult-use market. Non-edible cannabis products shall not contain more than 2,000 milligrams of THC per package if intended for sale only in the medicinal market.”

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According to the OC Register, California has surprisingly few licensed testing labs, which would mean another way that the legal market may be feeling pinched. While the new regulations were announced well in advance, thus giving retailers a chance to sell off noncompliant inventory, price increases have resulted. According to a Deloitte survey, “Consumers willing to pay a premium” for legal marijuana “up to a point.” The survey goes on to say that “In Ontario, for example, consumers who today pay an average of $8.33 per gram are willing to pay up to $9.33 per gram—12 percent more—for legal product.” Whether California’s prices will stabilize, and how much business the black market truly is taking away from retailers, remains to be seen.

What do you think? Have prices changed in your area? Will customers prefer legality and better quality control or lower prices? Leave a comment below.

SEE ALSO: Vermont officials ignore orders to measure marijuana content in edibles.

About the Author: Eric Howard

Eric Howard, who lives in Los Angeles, is a staff writer for Marijuana and the Law. His most recent book, Taliban Beach Party, appeared in 2017.

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