This state is a classic example of how the country’s economy would grow once the marijuana industry is legalized nationwide.
With a total of $1.4 billion in taxable cannabis sales in the second quarter, California takes the lead as the state with the highest sales of weed in the United States of America.
From being the first state to approve the medical use of marijuana in 1996, to now hosting some of the biggest cannabis farms and dispensaries in the country, California has always been at the forefront of the cannabis industry in this country.
Cannabis Sales in the U.S.
The cannabis industry makes revenues worth billions of dollars from the states that have legalized either or both the use of recreational cannabis and medical cannabis.
Sales are somewhat limited because the drug is still prohibited based on federal laws. However, this has not hindered the popularity of the drug among patients and adults in the country.
As more pro-cannabis laws are being approved, the sales in each state are increasing. The U.S department of commerce classifies cannabis stores under a segment called miscellaneous store retailers.
The latest figures obtained from this segment show that as of July, cannabis dispensaries single-handedly increased sales by 3.5% from June to July. These dispensaries cannot be referred to as “small” any longer. All dispensaries across the country are doing more than fine. In the last quarter, total retail sales lagged, however cannabis retail sales continued to boom. This sale contributed to the economy in immense ways.
At the last count, 15 states have legalized recreational weed while 35 states allow medical marijuana programs for licensed patients. Among these states, few have stood out in the way they have swiftly built infrastructures and passed more policies for the growth of their cannabis industry. Some of these states include California, Colorado, Michigan, Washington, Nevada, and Illinois.
California Makes The Highest Cannabis Revenue In The U.S
The total tax revenue realized from cannabis sales in 2020 is over $800 million. The medical and recreational weed industry in California made combined sales of up to $4 billion in the past year.
California has the largest legal cannabis market across the United States. Investors troop into the state in droves because of the amazing revenues that can be gotten from the cannabis industry.
Despite having a recreational marijuana sales market that is barely three years old, the state holds the record for having the biggest legal recreational cannabis market, surpassing Washington and Colorado. The booming sales are projected to continue increasing for the next months.
Deeper Insight On Cannabis Sales in California
The California Department of Tax and Fee Administration (CDTFA) released reports that state that California’s taxable cannabis sales increased by 11.2 %. Taxable cannabis sales in Q2 rose to $1.4billion. This means that legal cannabis sales have jumped by 108% since 2019 Q2, and 24.4% since 2020 Q2.
The above figures are astonishing as they do not include medical marijuana sales or black market sales. Sales of medical marijuana in California cannot be taxed by the government and the Black market industry has no trackable records for the CDTFA to observe and report on.
Analysts believe that the black market sales which are off the charts most times equal or surpass sales realized by the regulated market.
From the regulations guiding the legal recreational market, the government generates revenue from the excise tax, cultivation tax, and cannabis sales tax collected from the actors of the market.
Other factors contribute to the growth of the legal recreational cannabis market.
Size of the State
California has the third-largest landmass in the United States. This makes it one of the most populated states in the country. Its landmass also makes it perfect for the cultivation of cannabis.
California grows the most high-quality cannabis in the country, hence it has a lot to be sold within and outside the state.
The Emerald Triangle which is located between Mendocino County, Humboldt County, and Trinity County produces around 1.7 million pounds of cannabis every year, imagine how many millions this equates to— and this is not the only site where cannabis is cultivated within the state.
The old and young residents of California have showcased high domination of cannabis culture. In the 1960s, California was the global epicenter for cannabis culture within the states, with residents accepting the drug for its medical and recreational benefits. This culture has not waned and it contributes to the high sales of cannabis within the state.
The State records a high rate of tourist visits each year. An average of 260 million tourists come into California annually.
Like Colorado, California is prepared to boost cannabis tourism in the state. These new tourists will be able to experience the entrenched cannabis culture within the state as well as the legal use of the drugs.
What to Expect
A report written by Wolf Ritcher states that cannabis retail sales show a unique growth pattern that is rarely observed in other retailer segments. Around July of last year, the sales of taxable cannabis in the state were a little over $2.6 billion and now this figure has increased by 48% to $5.1 billion.
The heavy taxation of the products might be looked into as it encourages actors of the black market to keep churning out products with reduced costs. Residents have also learned to work around this by purchasing medical marijuana products instead. However, despite the high taxes, thousands of people buy legal adult-use weed daily.
California is a classic example of how the country’s economy would grow once the marijuana industry is legalized nationwide.
Federal laws when introduced will position other states for increased cultivation and sales. Perhaps one of these states will be able to threaten the supremacy of the California cannabis market. It will also encourage the NAICS to create a segment for cannabis retail sales.
Till then, California will continue to be the envy of cannabis markets around the world by making billions of dollars in annual retail sales. It will remain a cannabis powerhouse for a long time.