Warning lights continue to flash bright red for California’s cannabis industry as companies struggle to pay their bills, legal cannabis sales continue to drop, and pot tax revenue falls for the seventh straight quarter.
The latest tax figures released by the California Department of Tax and Fee Administration, or CDTFA showed that cannabis excise taxes fell a whopping 18.8% in the first quarter of 2023. That’s the seventh quarter in a row in which excise tax collections have fallen for the industry.
The falling tax revenue is the latest domino to fall in what appears to be a long-brewing economic crisis in the industry. Farmers have been reporting for years that they’ve been stiffed by distributors, distributors say that they’re not being paid by retailers, and now tax revenues are in free fall.
California’s legal market also continues to shrink. Total cannabis sales in the first quarter of 2023 were down 1.4% from the previous quarter, continuing a multi-year trend of falling revenue for cannabis stores statewide.
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