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California is working to avoid a shortage of legalized marijuana, state pot czar says

California hopes to avoid the same shortage of legalized marijuana that now faces Nevada when sales begin here in January. (File photo | Los Angeles Times)
California hopes to avoid the same shortage of legalized marijuana that now faces Nevada when sales begin here in January. (File photo | Los Angeles Times)

With Nevada suffering a shortage of legalized marijuana, California’s state pot czar said Wednesday that efforts are being made in her state to make sure sufficient licenses go to farmers, testers and distributors to supply retailers.

Providing temporary, four-month licenses to support some businesses including growers is planned “so we don’t have a break in the supply chain,” Lori Ajax, chief of the Bureau of Medical Cannabis Regulation, said in testimony at a legislative hearing.

Legal sales began July 1 in Nevada, but it immediately became clear there was not enough supply to meet demand, in part because unique rules provide alcohol wholesalers exclusive distributor rights. California does not have the same limits on who can distribute cannabis.

In California, licensing to grow, test, distribute and sell marijuana for recreational use is required by law to begin Jan. 2, but Ajax told lawmakers her agency will make sure that sufficient licenses are provided to growers and testers before the start of the year.

State Sen. Mike McGuire (D-San Rafael), chairman of the Senate Governance and Finance Committee, said there may be 20,000 marijuana growers who will want licenses. He urged consumers to be patient.

"This is not going to be a perfect process," he said. "We are going to make mistakes."

Another challenge is that marijuana cultivation and excise taxes will be collected by a new state Department of Tax and Fee Administration, which was created July 1 and is still in the process of organizing.

With federal banks refusing to process pot sale proceeds because the drug remains illegal under federal law, Richard Parrott, a manager for the new tax agency, said it is prepared to begin accepting cash payments for taxes from as many as 250 cannabis distributors.

“We believe we are on track to meet our implementation dates,” Parrott told the panel.

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