California's legal cannabis market continues to descend into financial turmoil, according to the latest annual tax figures released this week. The total market is shrinking in size, according to state-released data, and additional tax information obtained by SFGATE shows hundreds of cannabis stores are at risk of going out of business.
California's cannabis shops sold goods worth a total of $5.1 billion in 2023, down for the second year in a row and nearly 11% less than what was sold in 2021, according to the California Department of Tax and Fee Administration.
The latest figures show that California's legal market is significantly smaller than what analysts estimated it would be prior to legalization. The economic fallout in the pot industry isn't because Californians aren't buying cannabis; it's because people are still buying it at illegal stores. Illicit pot shops continue to thrive across the state, enticing customers with cheaper tax-free cannabis and undercutting the legal market in the process.
In fact, California's legal cannabis industry has a shockingly small cannabis market by at least one measure. The state has the lowest per capita sales of any cannabis market that's been operating for at least three years, according to Hirsh Jain, a cannabis consultant based in Los Angeles.
Read more at sfgate.com