California Cannabis Industry Structural Challenges

The time is upon us folks and the new California regulated cannabis industry is underway and booming! With that said there are some normal growing pains and challenges facing the industry as farmers try to retool their processes to fall in line with the new rules set in place.

For example, no one is used to the new Net Account System in where a farm or manufacturer can basically front product to distributors for up to 60 days before being paid. Naturally, this is uncomfortable for cultivators and manufactures but quite the opposite for distributors who are taking full advantage of this new option.

Obviously, the Net system was put in place to insulate distributors from being forced to pay for a product that should happen to fail Quality Assurance and Pesticide Testing. With that said 60 days seems a bit long from the cultivator and manufacturers point of view and they generally opt for a maximum of 15 to 30 days. It’s just a new negotiating chip on the table for both sides to play.

Businesses are still adjusting to new regulations but the show must go on and everyone is learning the new landscape at lightning speed. Thanks for reading our blog post and have a wonderful day!

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