Study: California Weed Sales to Hit $2.68 Billion by End of Year
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According to a new study, California weed sales are expected to reach $2.68 billion by the end of the year. Sales have gone up since last year when the state made about $2 billion from legal pot. The cannabis market research firm Arcview Group found that California alone accounted for 27 percent of the 2016 legal cannabis market in North America.
California Weed Sales
The most recent study on improving California weed sales was an analysis conducted by the University of California Agricultural Issues Center at UC-Davis. Researchers estimated that recreational marijuana will account for about $5 billion in annual sales. California’s medical marijuana sales are still far ahead of states that have already gone recreational. In fact, Colorado and Washington just broke $1 billion in sales annually, while California made $2 billion through medical marijuana alone. As soon as the California recreational market launches, it will immediately be the largest in the country.
Not to mention, the black market is still going strong in California.
Researchers estimated that about $5.7 billion worth of cannabis was sold illegally last year. However, that number along with medical marijuana sales are expected to drop once recreational marijuana sales begin in the state.
Does that mean the end of the black market? Not yet.
Recreational marijuana will have a 15 percent excise tax on top of the state’s 8.8 percent sales tax so there may be some incentive to purchase off the books. In the first year of legalization, researchers estimate that illegal sales will be nearly cut in half. So legalization is not great for everyone.
It looks like medical marijuana sales will be the one to take a major hit.
Researchers estimated medical sales would drop 70 percent. However, medical marijuana isn’t taxed as recreational will be so many regular users will have all the incentive they need to remain a part of the program. It will still cost a $100 fee to obtain a card so to someone that only smokes a couple of grams on the weekend it may not be worth it.
Flower Power
According to BDS Analytics, a lot of the money being spent in California was on cannabis flowers for smoking. They prefer a traditional smoke over edibles, cartridges, concentrates and other cannabis-derived products. Flower sales accounted for 55 percent of all sales made in the cannabis market. Indica is apparently the most sold cannabis flower in California.
The price of flower per pound has gone up since the beginning of the year. Many growers will be disrupted by the changes in regulation expected at the end of the year. As a result, they’re hiking prices because it will become expensive to operate in compliance once the new rules apply.
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