Patchwork Permissibility


Prop 64 Explained

When Proposition 64 passed in 2016, it established California’s recreational cannabis market. Prop. 64 included an “opt-in” clause requiring all cities and counties to opt into the specific types of cannabis activity they would allow in their jurisdiction. As a result, roughly 58% of California cities and counties still prohibit cannabis retail sales.

Some cities and counties license one type of cannabis business, like cultivation, but still prohibit retail sales. Local municipalities can also limit the number of retail businesses that can apply for a license. These limitations compound the patchwork permissibility issue to create ‘legal cannabis deserts’ throughout the state.


Why It Matters

California tracks every licensed product from seed to sale. Because unlicensed operators are not tracked, there is no way to verify where their cannabis came from or the conditions under which it was made. Unlicensed cannabis products don’t have to follow state requirements and could contain mold, heavy metals, bacteria or cutting agents. Many illegal cannabis businesses are also associated with
criminal activity like human trafficking, illegal firearms, dangerous substances, labor abuses, and violent crime.


Convenience Drives Consumer Demand

Convenience is a key driver influencing consumer purchasing behavior. For Californians who do not have convenient access to licensed cannabis retailers, the illegal market remains the easier option. While the exact size and scale of the illegal market remains difficult to quantify, estimated illegal cannabis sales are higher per capita in impermissible areas.

Consumer Confusion Doesn’t Help

According to a recent statewide poll, 85% of Californians in impermissible areas either incorrectly believe cannabis retail sales are legal in their area or don’t know. In areas where cannabis retail sales are prohibited, education can help correct the record, but changing consumer behavior will be a steep hill to climb if the illegal market remains the only, or most convenient, option.

Environmental Damage & Resource Loss

Illegal cannabis businesses have no regard for the state’s ecosystem. They are known to contaminate surface water, poison wildlife, and steal valuable natural resources.

Funding Public Services

Licensed dispensaries pay state and local taxes that help fund public safety, education, healthcare, transportation and other vital services. State-licensed cannabis businesses support tens of thousands of jobs across the state and generate billions of dollars in taxable sales revenue every year. Illegal cannabis businesses cut into the market share and harm these business owners who work hard to comply with the state’s regulations that protect consumers.

A majority of California adults consume, or have consumed, cannabis. 88% of cannabis consumers say they would buy cannabis from a licensed dispensary. While consumers overall want to do the right thing by purchasing legally, they simply do not have universal access or lack the knowledge to do so.