California faces sluggish legal cannabis sales

Retail hashish gross sales in California declined final 12 months for the primary time since turning into authorized in 2018, in response to information launched final week.

Why it issues: Specialists say the income decline is the results of deep-seated points with the state’s authorized weed market and the voter-approved Proposition 64, which promised all adults in California entry to secure hashish.

Particulars: California’s $5.3 billion in authorized pot gross sales in 2022 was down 8.3% in comparison with the prior 12 months.

• In San Francisco, hashish gross sales dropped from $260.6 million in 2021 to $228.8 million in 2022 — a 12.2% decline.

What they’re saying: Seeing hashish gross sales degree out in California was anticipated, however not so quickly, Hirsh Jain, a hashish advisor and the vice chair of the California Hashish Chamber of Commerce, informed Axios.

Sure, however: Different markets like Washington and Colorado noticed gross sales declines as effectively in 2022, indicating broader financial elements may very well be at play, Nicole Elliott, California’s director of the Division of Hashish Management, informed Axios.

• Elliott additionally famous that California’s authorized hashish gross sales “grew considerably between 2020 and 2021” — 23% in response to state information.

Zoom out: The authorized marijuana market within the U.S. has tripled over the past three years and is now price roughly $64 billion, in response to a current examine by Coresight Analysis.

Between the traces: California’s sluggish efficiency final 12 months may very well be a operate of the state’s comparatively low variety of hashish retail shops per capita, Jain suggests.

• A current report by the hashish web site Leafly exhibits solely three authorized dispensaries per 100,000 residents in California. Compared, smaller states like Oregon and Montana have 19 and 39 shops per 100,000 individuals, respectively.

Be good: As a result of Proposition 64 requires native governments to choose in, leisure hashish gross sales are nonetheless blocked in over half of the cities and counties throughout California.

• And, even when cities give the inexperienced gentle, native approval processes could cause years of delays for retailers attempting to open their shops.

What we’re watching: Making modifications to California’s hashish business is poised to be a high problem amongst state lawmakers in Sacramento with dozens of payments submitted on the subject this legislative season.