America’s largest marijuana market sold more than $1 billion of marijuana through March. And that’s only the beginning.
For recreational marijuana sales in California — the nation’s most populous state, and the nation’s oldest and most entrenched marijuana market — it was never a question of billions. It was always a question of “how many” billions. And, just four months into the era of recreational cannabis sales, we now have an idea: At least four, with many more to come.
After watching adult-use cannabis consumers tear through more than $1 billion worth of marijuana a year in Colorado and Washington — states with a fraction of the population — it was safe to assume California’s appetite for legal cannabis would be bigger. The state is is not expected to release official sales estimates for the first three months of the year until May, according to the San Diego Union Tribune. But in the meantime, all signs are that the country’s largest cannabis market is booming and at a pace to render figures from the country’s first two legal cannabis markets quaint memories.
As per the paper, analysts predict that sales for the first quarter of 2018 “could surpass $1 billion.” If sales continue at that same pace, sales for all of 2018 will exceed $4 billion.
As for that robust pace, there’s every indication that it is merely prelude, and that a steep acceleration awaits.
For context’s sake: In Colorado, the largest recreational market to date, sales topped $1.5 billion in 2017, according to state revenue figures. That tally itself was something of an accomplishment, achieved after several years of sustained double-digit growth.
Year-to-year, sales in Colorado increased 31 percent in 2016 and another 15.3 percent in 2017, as the Cannabist noted.
In this context, one vital point to consider is that California cannabis merchants have racked up seven figures’ worth of sales despite limited retail opportunities.
Dispensaries are still not yet legal in much of the state, and in the state’s largest city, Los Angeles, sales began several weeks after they did elsewhere on Jan. 1. And industry experts as well as anecdotal tales from merchants and consumers suggest that high taxes have shunted off a significant portion of sales to “seshes” and other unregulated retailers on the secondary market.
Those taxes may soon be lowered. Lawmakers in the state Legislature appear to have taken concerns from retailers seriously. Locally, officials in Berkeley, California, have already moved to cut the local tax levy in half, from 10 percent to 5 percent.
Whether or not this trend towards lowering the barrier for entry continues and this black market activity is eventually captured by the regulated market, California’s ceiling is… well, bigger than soda, according to some analysts.
According to a report issued Wednesday by Cowen and Company, sales of legal marijuana in America should exceed $75 billion by 2030, a figure comparable to the sales of soft drinks in 2017.
If that number seems outrageous (and it is) consider: cities in California have worked hard to clamp down on sales of soda pop, over concerns about the link of soda consumption to obesity. In contrast, fears over cannabis sales have to date been unfounded.
About the only negative impact cities in Colorado, Washington, and across California have encountered has been the dilemma of what to spend the newfound tax revenue on.