SANTA CRUZ — The shelves at some local cannabis dispensaries are bare as the budding businesses scramble to adapt to a new set of statewide testing and packaging rules that took effect Sunday.
The apparent shortage of cannabis follows months of low prices and fire-sales as pot shops sought to clear their inventory of untested products that are now illegal to sell. As much as $90 million in non-compliant cannabis may be left over and would need to be destroyed under the new rules, according to the United Cannabis Business Association.
As of July 1, retailers must sell pre-packaged cannabis products that have been lab-tested for potency and pollutants such as pesticide, fungus and heavy metals. Some retailers had been hoping the state would extend its six-month grace period or soften the rules before the July deadline, but early in June the state Bureau of Cannabis Control finalized its emergency regulations, leaving just more than three weeks for the pot shops to try to sell as much of their non-compliant product as they could.
Since then, the state’s few licensed cannabis labs have been flooded with orders, creating a sizeable backlog, according to SC Labs vice president and co-founder Ian Rice.
“There are certainly not enough labs in the entire state to meet the immediate demand of lab testing,” Rice said, adding that the lab’s employees are working overtime to try to meet the demand and qualified workers are being hired on the spot. “It’s a very demanding time for everybody,” he said.
At the CannaCruz dispensary on Limekiln Street in Santa Cruz, the shelves — usually lined with dozens of kinds of flower, tinctures, edibles and other products — were almost completely bare Monday.
“It’s really bad,” said Grant Palmer, the dispensary’s co-owner. He said the dispensary already lab-tests its wares, but the state now requires a different kind of test — and labs themselves are overloaded with samples awaiting test. “We have all our product upstairs ready to be sold, but we can’t label it until we get our tests back, and the tests are all late,” Palmer said.
CannaCruz was among a number of local dispensaries feeling the effects of the new regulations. A manager at Curbstone Exchange in Felton said customers should expect to find little on their shelves at least for the next week, and the TreeHouse dispensary in Soquel also had empty shelf space in evidence, according Jessica Grace, head of marketing and outreach.
In Aptos, dispensary Santa Cruz Naturals managed to keep its usual offering of 40 or so strains of cannabis on sale as of Monday, according to general manager Louisa Disheroon. But the shop’s selection of edibles and other goods had slimmed down considerably, and tens of thousands of dollars worth of non-compliant products had been pulled from the shelves and will have to be destroyed, according to owner Colin Disheroon.
Other local retailers say they’ve been able to keep their shelves full even amid the difficult transition.
“I’m fully stocked right now,” said Josh Lechner, general manager at Capitola Healing Association. Lechner said the Live Oak dispensary was quick to transition to purchasing cannabis from state-licensed distributors, putting them at the front of the line for the limited supply of compliant pot.
KindPeoples’ two locations in Santa Cruz and Soquel also remained well-stocked as of Monday, according to co-owner Khalil Moutawakkil. But Moutawakkil said the statewide industry could continue to struggle to keep its shelves stocked throughout July.
After that, “the shops that did run low on supply will hopefully rebound and things should stabilize back to more or less the levels we were at,” Moutawakkil said.