Marijuana Trade Show in San Jose Focuses on High Tech, Soaring Costs

Technology has taken center stage at a trade show in Silicon Valley. But the industry of focus is not software, gadgets or the cloud.

It's weed.

The Terpenes and Testing World Conference at San Jose McEnery Convention Center is geared toward the business of buying and selling marijuana, a budding venture in California. It comes as a new report shows legal pot sales in the state aren't meeting expectations while black market pot sales are said to be soaring.

The technology on display at the conference is impressive, from a grow box that can replace a greenhouse to ways for testing the potency of home pot without a lab.

But people in the business of selling pot legally say more efficiency is necessary because operating expenses, and especially high state and local taxes, are driving up costs and driving many consumers away.

"Not many people who used to go to dispensaries are going anymore," one industry rep said. "It seems there’s a lot of newer people who are going, and that’s what is actually helping keep the show going. A lot of people I’m imagining are reverting to the black market."

A new report by BDS Analytics says the first two months of legalized cannabis sales in California fell $44 million short of projections. And the high price of legal pot is benefiting so-called unlicensed retailers who ignore regulations and standards.

"This industry, there is an element where you can be a rat in a wheel, where you have regs and these standards," conference producer Celeste Miranda said. "You get caught up. And tomorrow, it’s completely different."

Marijuana legalization also means lower wholesale prices for local growers and more profit in illegal markets. The Santa Clara County Sheriff’s Office marijuana eradication team points out 80 percent of pot sold in the U.S. comes from California.

"We aren’t concerned so much at the consumer level but more on the cultivation level, those that are growing marijuana and where that marijuana is going," sheriff's spokesman Sgt. Richard Glennon said.

The drop in sales and the thriving black market seem to have caught the attention of legislators. Advocates at the conference say there are now some proposals to lower state taxes and with it lower the price for legal pot.

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