(The headline for this story has been corrected to note that sales were $1.25 billion in the first quarter.)
First-quarter cannabis sales in California slid to $1,249,584,223, the lowest quarterly total since the onset of the COVID-19 pandemic, according to the latest statistics from the state’s Department of Tax and Fee Administration.
Sales were down 5.9% from the same quarter a year ago and the lowest since the second quarter of 2020, when sales were $1,153,285,028.
The first-quarter statistics put California’s marijuana operators on track to generate just less than $5 billion in sales this year, or 7.1% less than 2022, when taxable sales of recreational and medical marijuana eclipsed $5.3 billion.
If projections hold true, cannabis sales would fall for the second consecutive year in the world’s largest regulated market.
It’s the first time that has happened since regulations for adult-use retail sales were established in 2018.
Sales last year decreased 8.6% from roughly $5.8 billion in 2021, according to state data.
Beyond high taxes, competition from the illicit market and wide swaths of the state still lacking retail access, a credit crises has engulfed the California industry for the better part of a year.
That has prompted marijuana distributors and brands in the state to hire a credit association to rate retailers in hopes of reducing hundreds of thousands of dollars in unpaid invoices – and reining in repeat offenders.
In a related initiative, a group of California cannabis companies formed a coalition to raise awareness and provide solutions to mitigate the credit crisis threatening to upend the local marijuana industry.
Dozens of cannabis brands, wholesalers and producers last week launched Financial Stability for California Cannabis to confront complex debt problems affecting the entire supply chain.
Chris Casacchia can be reached at email@example.com.