Posted on 02/23/2023 6:40:23 AM PST by Oldeconomybuyer
Legal pot sales in California shrank last year, falling 8% compared with 2021. This is the first time cannabis revenue has dropped since the sale of cannabis became legal in 2018.
Customers purchased $5.3 billion worth of legal pot products in 2022, according to data released Wednesday by the California Department of Tax and Fee Administration. That represents an 8% drop, or a decrease of $473 million, from what customers purchased in 2021.
The falling sales come as the legal cannabis industry faces multiple headwinds, including competition from a booming illegal market, crashing wholesale prices and yearslong licensing delays.
Hirsh Jain, a cannabis consultant at Ananda Strategy and the vice chair of the California Cannabis Chamber of Commerce, said in an email to SFGATE that the drop in sales is “a warning signal” that “the state's legal market is on the brink of collapse.”
Jain attributed the drop in sales to licensing problems with the local governments, which have been slow to give licenses to legal pot entrepreneurs. Jain estimated that 700 retail cannabis stores have been unable to open because they lack licenses from local governments.
The illegal cannabis market has also hampered California’s pot industry. Illegal cannabis farms have proliferated across the state, and San Diego officials said this month that cannabis tax revenue is expected to drop 23% due, in part, to illegal cannabis delivery services. Gov. Gavin Newsom and the California Department of Cannabis Control launched a new task force last year to try to crack down on illegal cannabis operations in the state.
(Excerpt) Read more at sfgate.com ...
I must say I'm somewhat surprised (and I shouldn't have been) at the now common public consumption of marijuana. I see it and smell it everywhere.
Oh gosh it ain’t the bonanza that was promised
The Mexican (CIA) Cartels have taken over the weed business in most of California and they are putting all the legal weed growers out of business. Price was about $2k per pound now it is $400, there have been numerous articles on this subject lately.
Legal pot sales fell by 8%. What to do, California?
The solution is simple. Increase the CA pot tax by 8% to make up the difference.
Higher taxes always make things better. It’s the progressive way.
The prices for legal weed in California are sky high due to the taxes imposed by the California state government. They’re effectively incentivizing continued illegal sales.
If you thought there was a “War on Drugs” before, just wait until the Government has a skin in the game.
We were told decriminalizing it was going to defund the drug cartels.
How’d that work out?
The consumption has not changed per se... Just no one is hiding anymore me thinks...
It didn’t because government is artificially inflating the price with insane levels of taxation.
L
Just as cigarettes were black marketed due to an expensive tax on them so will pot. Cartels can undercut legal cost and still make a huge profit. Personally I recommend neither cigarettes or pot since there are other things to spend the money on that are pleasurable without cutting my lifespan short.
The State has failed to cut off the illegal product. That’s the failure to honor the unwritten rule, the State kills the illegal product, just like bootleg liquor. The State only has itself to blame for the failure. The legal operations pay the Vig and receive nothing in return!
Black market marijuana is similar to bootleg liquor, but with one important distinction: producing liquor has a substantial cost (relatively speaking), while the cost of growing marijuana is so low that the barrier to entry in the market is effectively $0.
The IRS took over The Mustang Ranch, a legal brothel for nonpayment of taxes. The government decided it would run the business to recover the amount they thought they were owed. After an astonishingly short time they closed the brothel as it was losing too much money. A senator remarked, “Only government management could f@@k up a business that sells beer and p##@y.” Government involvement in anything, no matter what, creates an instant overhead that is difficult to overcome, especially if the business so interfered with is competing against a “real” unencumbered business. Anyone who thought the government could become the one and only arbiter of success in the drug market was delusional. Grocery stores and auto manufacturers, yes, they are all legal. But the drug market was always illegal, and the government thought it could make them legal and tax it? Crazy.
Weed is extremely easy to grow, so high prices and high taxes were never going to sustain themselves.
Who knew?
It is impossible to effectively regulate and tax something that literally grows like a weed. There will always be non-regulated channels.
The state tried to “legalize” it by regulating and taxing it. That is not legalizing it, that is co-opting it.
True legalization would be a total lifting of all penalties and regulations associated with the production and consumption of cannabis. I think this is a horrific idea, but truly you need to, as a society, either accept it, or not.
BTW, I do think there would still be room for DWI laws as related to any substance that messes you up, as well as employers being able to put non-use as a condition of employment.
And yet States make the cost to entry for legal operations very high without protection. Recipe for Failure...
Illegal pot laced with fentanyl pouring in from Me-hi-co with the cooperation of FJB’s administration, apparently provides a better “high” for the buck ... most often only once, though.
I’m more libertarian when it comes to drugs people Wanna do certain things your own body then let them. That being said the whole reason it’s dropping is cause California is taken all the profit out of it for itself out of the people that sell it making everything so expensive that it’s cheaper for people to go back to buying it on the black market.
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