Health & Wellness

How Big Alcohol Is About to Get Rich Off California Weed

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Excerpt: More than 20 years later, Hezekiah Allen remembers the Blackhawk helicopters hovering over his childhood home, the armed soldiers barricading the road to the family’s northern California pot farm, the neighbor who hang-glided to escape from the Feds. More than once, Allen came home from a friend’s house to find his mother and stepfather had been arrested again.
Allen eventually entered the family business and was himself arrested in 2009 for cultivation and intent to sell. The charges, dropped for lack of evidence, didn’t impede his ambitions: in 2014, he ran unsuccessfully for California State Assembly on an environmental platform. A few months after bowing out, the scruffy 30-year-old college-dropout, who was by then the executive director of a coalition of small-farm marijuana growers, moved to Sacramento and elbowed his way into negotiations over new rules governing how medical marijuana would be grown, distributed and sold.

“Our parents wanted to get back to the land. We want to get back into the system,” says Allen, who grew up in a house with no plumbing. “I’ve been lying my whole life about who I am and what my family did. Now I’m addicted to telling the truth.”
In Sacramento, he insisted that growers be treated like farmers of any other crop. Most important, he won the removal of a limit on the number of growing licenses for small farms. But the price of that legitimacy has been steep and it is about to redefine the nature of the marijuana industry in ways that make many of its most committed supporters deeply uncomfortable. California’s iconic counter-culture drug is about to be treated just like a six-pack of beer.
Under the new regulations, licensed distributors were given control over measurement, taxing and testing for all medical marijuana before it can move to the retailer. The rules are modeled on the system that emerged at the end of Prohibition to wrest control from mobsters and their illegal liquor empires. States required wholesalers to bring alcohol from the manufacturer to the retailer, a system that has proven fantastically lucrative for distribution companies. Some of those players are now poised to make millions of dollars as the middlemen in California’s burgeoning medical marijuana market.
The familiar alcohol distribution model gives comfort to California law enforcement and state regulators who still view marijuana growers with suspicion, even 20 years after medical marijuana was legalized. But it runs counter to the 22 other states that have legalized marijuana in some form where cultivators sell their wares directly to retailers.
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