It means that the commercialization provisions of Prop. 19 - taxation and regulation via local option - are a dead letter. Presumably the Justice Department would ask for an injunction barring any California official from issuing a license - in effect, a license to commit a federal felony - under Prop. 19, and I expect that the courts would issue such an injunction. Even if no injunction issued, any grower or retailer who filed California tax or regulatory paperwork would be confessing to a federal felony. So there wouldn't be open commercial growing or (non-medical) sale.
That doesn't effect the home-growing provision of Prop. 19: anyone who owns or leases property could grow one 5′x5′ plot per parcel. Since that activity will be legal under state law, state and local cops won't be able to investigate, and there's no way the feds have the resources to deal with 25-square-foot grows.
The big question left unresolved by Holder's announcement is the behavior of state and local cops with respect to commercial growing and (non-medical) retailing. If no county or municipality can issue a license, that activity will remain illegal in California. If California law enforcement continues to enforce those laws vigorously, nothing much will change. If not, there's no way to put enough Federal resources in the field to make up for the absence of state and local enforcement, and California will become the cannabis supplier to the rest of the country, and probably Canada.
It's worth reading the whole thing. Kleiman offers some good context for Holder's decision.