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California Expansion Strategy

California is arguably the most important cannabis market in the United States. The state’s cannabis market is also highly fragmented and has the most regional variance of any cannabis market in the country. Unlike other states, in which the number of cannabis licenses issued and other key policy decisions are determined at the state level, California has established a highly decentralized approach to cannabis licensing and regulation. There are thus substantial differences in how cannabis is regulated in cities and counties across the state. The state can be understood less as a single market, and more as a series of large regional clusters, each of which have fairly unique and constantly evolving regulatory characteristics and market dynamics.

Proposition 64, which passed in 2016, was rooted in the idea of local control. This initiative, which created the structural foundation for California’s current cannabis market, empowered each of California’s 482 incorporated cities and 58 counties to determine whether to allow and how to regulate commercial cannabis activity in its borders. California’s long-standing tradition of local control reflects both the immense size of the state and the considerable political, cultural and economic differences in its urban, suburban and rural communities. Decisions made at the local level will continue to shape the commercial cannabis opportunities available in California over the next several years, as well as how commercially viable each of those opportunities are.

For us, understanding the California market is an obsession. Through considerable effort, we have developed a very granular understanding of the commercial cannabis markets in each of California’s 482 cities and 58 counties. We have tracked developments in each of these 540 jurisdictions in painstaking detail for several years, and have a nuanced understanding of the local dynamics in each jurisdiction in the state. We work tirelessly to anticipate the local policy changes that have the potential to reshape regional market dynamics in California, from the repeal of local commercial cannabis bans to revisions to local tax policy to the adoption of regulatory changes. We bring this deep market expertise to bear on behalf of cannabis businesses that are looking to develop their footprints across California. We equip them with the detailed market intelligence they need to make highly strategic expansion decisions and secure assets that have enduring commercial value.