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California’s Cannabis Conundrum: Legalization Will Lead To Fewer Dispensaries, Not More

With legalization of recreational marijuana just around the corner in California, the state is about to embark on what could be a $5B industry and a boon for tax revenue. But state regulations have created high barriers to entry and many cities and counties have banned cannabis outright.

Legalization in California will not translate to an immediate influx of cannabis dispensaries. In fact, many dispensaries now in business will no longer be able to continue operations past Jan. 1. States like Colorado created a more open market with fewer regulations when it legalized recreational marijuana in 2012, leading to an explosion of cannabis businesses. California requires dispensaries to be at least 600 feet from schools, to close at 10 p.m. and to have 24-hour surveillance, among other regulations. Jurisdictions also have the right to be more restrictive.

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