Cannabis sales in California declined in 2022 for the first time since the launch of the adult-use market in 2018, according to Department of Tax and Fee Administration (DTFA) data outlined by Forbes. In all, sales dropped 8.2% to $5.3 billion from the $5.77 in sales last year.
California still represents 20% of the nation’s $26 billion legal cannabis industry, the report says.
The wholesale price for cannabis in California was down last year by 26% year-over-year to $665 a pound. Since 2017, the year prior to the launch of legal sales, California cannabis wholesale prices are down about 50%, according to a New Leaf Data Services report outlined by Forbes.
Pablo Zuanic, an analyst at Cantor Fitzgerald who covers cannabis, told Forbes he believes that mature markets like California saw a revenue boost in 2020 and 2021 due to increased consumption during the Covid-19 pandemic and that the end of pandemic-era policies, including stimulus checks, paired with rising inflation, have added to the decline. He noted that there was “only” an 8% drop after a 23% increase in 2021 and a 68% increase in 2020.
California has about 1,000 dispensaries serving the state’s more than 40 million residents but 60% of California jurisdictions – or 33 counties – do not allow adult-use cannabis businesses within their borders. Last month, officials launched a $20 million grant program to increase legal cannabis access throughout the state. The grant will prioritize areas where national surveys find high cannabis consumption but have little to no access to cannabis retailers, officials said, adding that the program “seeks to incentivize local best practices by prioritizing programs that support equity operators and utilize existing licensing and permitting practices.”
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