By Ruth Hill R.N.
The California Cannabis Market 2024 Report, from GreenState.com, attempts to paint a picture of industry stability, citing increased biomass production and rising wholesale flower prices as signs of a healthy market. These numbers obscure a harsher reality. The state’s legal cannabis industry is stalled, manufacturing is collapsing, and much of the market (biomass and consumers) is being siphoned off by illicit operators. Simply put, unregulated operators are buying up licensed biomass and undercutting licensed manufacturers.
California’s licensed cannabis manufacturing sector is collapsing under regulatory pressure, excessive taxes, and unfair competition from unregulated Δ9-tetrahydrocannabinol (THC) products. Brands are closing their doors driven by underground market forces rather than legitimate business growth. THC-rich biomass — functionally indistinguishable from cannabis—is being mislabeled as “hemp” to evade taxes and regulations, destabilizing the legal market and driving its decline.
Jason Reposa of Getgoodfeels runs a marijuana and hemp company and sees firsthand how an arbitrary line in the sand can create unnecessary chaos. “Our industries are stuck in their civil war over a plant. Yes, a plant. The same plant, actually – just with an arbitrary THC percentage that someone pulled out of thin air.”
Reposa explains, “Think about it like this: imagine if we forced beer and spirits to operate as separate industries, with different rules, stores, and shipping laws – even though they’re both selling alcohol in different strengths. Oh wait, that’s exactly what we did after Prohibition, and we’re making the same mistakes again.”
Cannabis, the plant itself that’s been used for thousands of years, has no legal definitions. Hemp, legally defined as cannabis plants with less than 0.3% THC, can cross state lines thanks to the 2018 Farm Bill. Marijuana, the legal term for cannabis plants over 0.3% THC, is sold through state-licensed dispensaries.
Real Losers are Consumers
This industry split doesn’t just hurt businesses. Think about shopping for THC products: same molecule, same effects, but totally different rules and prices depending on whether it’s hemp-derived or marijuana-derived. The numbers tell an interesting story. The hemp-derived product market continues to grow steadily despite regulatory challenges, while state-legal marijuana sales have reached record highs. States like California alone generate over $4.4 billion in 2023. That’s a lot of money for industries fighting over the same plant.
Marijuana companies: heavy regulation, high trust, must follow strict state rules, can sell high-dose products, trusted by customers for high quality, and sell locally only. But get crushed by taxes and can’t use normal banks. Hemp companies have broader reach, more significant headaches, can sell across state lines, are easier to start up, and have more places to sell. But they are limited to low-dose products, high shipping costs (up to $60 for a case of drinks in some regions!), and fight constant battles over synthetic products.
States That Get It Right
Minnesota’s innovative approach created clear rules that work for everyone: A market that works. Businesses know what to do, customers know what they’re buying, and everyone follows the same rules. Oregon’s unified plan did something brilliant: they stopped treating hemp and marijuana as totally different things.
As a member of the Hemp Beverage Alliance, Reposa sees the industry working to set its standards without federal oversight. “While I don’t agree with all proposed limits, their framework offers a solid starting point: A blueprint for moving forward. From my unique position straddling both industries, here’s what needs to happen. Break down retail barriers.
Let marijuana dispensaries sell hemp products. Enable both in-store and online sales.”
Minnesota and Oregon show us what’s possible when we focus on making safe products that customers can trust. Whether federal legalization comes in 2024 or later, the time to prepare is now. Industry analysts project significant growth for both sectors through 2025, with increasing state legalization driving marijuana sales and growing consumer acceptance boosting hemp products. After all, we’re not two different industries. We’re just two sides of the same plant, trying to grow in different directions.
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