California marijuana legalization ushered in an overwhelmingly enormous amount of positive results. It did, however, bring in some pain points for both businesses and customers. The entire supply chain stands at the center of one of the most considerable recent frustrations. Current regulations impact the entire transaction. From cultivation to packaging to purchasing, every person involved feels the brunt of the rules.
At Caliva, the team takes each rule in compliant strides. They understand that in this evolving market, things will change. For each current pain point, there’s opportunities to learn about what the customer and business demands. California’s market is sure to evolve like other states. However, for now, here’s how California’s supply chain exists and how a dispensary operates in California.
How New Regulations Impact the Customer Dispensary Experience
On January 1st, new regulations came into effect. Some of the notable regulation changes currently include:
- Dosage maximums varying between ingestion types
- All products must be sold in the package purchased from the supplier
- All packages must be resealable and childproof
- Updating verbiage on product packaging
California dispensaries could use products purchased before January 1st under past regulations. Caliva and others stocked up on supplies to give themselves additional lead time to resolve any lingering pain points in the supply chain. That proved not to be the case, though, as we sold through most of that product in just a few short weeks.
The changes to packaging proved to be difficult for many dispensaries. Caliva Purchasing Specialist Omar Ortiz cites the required updates to bagging as a critical pain point. Updating labeling and packaging added to product productions’ lead times, meaning a slower move to retail. “We are building out our team to better streamline this process,” Ortiz explains. It even called for some existing on the market products to have its packaging redesigned, proving to be especially difficult.
Packaging is just one of the factors to drive prices up. Taxes played a large part as well. Buying some marijuana products in California nearly doubled overnight mainly due to new taxes. For San Jose cannabis dispensaries, they must now impose a 15% excise tax in addition to a 10% city business tax as well as a 9.25% local sales tax.
Despite the current price rise, Oritz looks to past examples to see a positive outcome not too far off. “I think if we look at other states that have legalized, prices will eventually go down, which is why brand recognition is important.” Instead, he emphasizes the quality of Caliva’s products. To ensure that Caliva remains the #1 trusted brand in cannabis, Ortiz and the entire team always keeps their focus on a higher brand standard.
Other pains for customers could lead to discoveries. Ortiz notes that the cap on dosages in edibles may have an impact on its market potential. “I think we will start seeing capsules and tinctures start increasing since those products can have higher milligram content.” This could lead to customers finding new preferred products, while educating Caliva about rising customer demands.
In the build-up to 2018, Caliva worked tirelessly to meet regulations while providing customers with the consistent products and packages we are known for. That continues today, where the team educates itself on the latest developments all the time. Additionally, budtenders pass on information to customers just the same, even when it that talk is about price changes.
With an eye always on quality and service, Caliva actively seeks to find the best solution for any scenario.
How Regulations Impact Suppliers and Dispensaries
Pain points also exist for California’s suppliers. Just like Caliva, suppliers are modifying prices and processes to meet the increased materials and labor demands. To avoid labor problems, Ortiz recommends working only with suppliers that excel in quality control and understand regulations.
Caliva’s supplier relationships weren’t an area that needed much revision heading into 2018. As part of our commitment to a higher standard, Caliva works with a smaller pool of suppliers than most companies. Doing so ensures that products only come from trusted partners with thorough quality assurance protocols in place. This was a commitment Caliva made when opening in 2015 and continues today. Ortiz points out that working with a particular caliber of supplier helps minimize the back and forth between Caliva and its suppliers.
One key to maintaining successful supply chains is communication. Actively sharing information helps keep all in the supply chain informed of the latest news. This helps each side stay informed on the market. Additionally, it helps nip any misconceptions in the bud before they require additional back and forth. Keeping this line of communication helps everyone stay aligned on the demands of state and local officials. By taking these sorts of measures, Caliva stays up to code while providing customers with the best products.
An Exciting Future
Today, Caliva is eager to meet the evolving California recreational marijuana market. The current demands can become stressful and tiresome, but it is all part of the process. Caliva and others are doing their part to help bring this exciting marketplace to its potential.
To continue as a valued brand in the space, Caliva aims to further enhance both its online and brick and mortar experiences. Furthermore, Caliva products are already available in some dispensaries across California. With packaged products and strains coming down the pipeline, Caliva will continue to improve its pipeline, so customers further recognize the brand and its superior product.