California Cannabis Sales Fell 9% In 2022
February 28, 2023Cannabis sales in California fell last year, according to data from the state’s Department of Tax and Fee Administration. Total taxable sales (encompassing both recreational and medical marijuana) totaled $5.3 billion in California last year, down from approximately $5.8 billion in 2021. Sales were highest in the second quarter of the year when they topped $1.4 billion and lowest in the final quarter when they slumped to $1.27 billion. That marked the lowest dollar value in the state since Q2 of 2020, when $1.15 billion of cannabis was sold. California collected roughly $1.1 billion in cannabis taxes last year, down from around $1.4 billion in 2021.
There are numerous reasons for the declines, some prevalent throughout the industry and some specific to California. Top of the list is the continued slide in the wholesale price of cannabis, which is a challenge just about everywhere cannabis is legal, driven by pressure from the illicit market and producers’ inability to ship across state lines, sequestering product where it may not be needed.
California’s regulatory scheme also continues to stifle the industry. The state scrapped its tax on cultivation last summer following prolonged outcry from growers over the impossible margins their businesses faced. Growers in Mendocino County are now calling on the state for an urgent intervention in the process that asks industry participants to secure local go-ahead before they can apply for state-level licensing, alleging that local authorities have failed to “establish a process capable of moving good faith cannabis operators toward state annual licensure.” Local control disputes like this have left large swaths of the state still without cannabis retail.—Danny Sullivan
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