California’s licensed cannabis retailers reported $956.7 million in sales in the first quarter of 2026, down slightly from $976.5 million in the same period a year earlier, according to state data.
First-quarter sales were also below the $1.07 billion reported in the first quarter of 2024 and lower than totals from earlier years, as per the California Department of Tax and Fee Administration.
Many markets are experiencing declines in sales revenue despite selling more units as a result of price compression.
However, unit sales were also down slightly in the first quarter of 2026, according to state Department of Cannabis Control data.
What are the trends in California cannabis sales?
The department said California collected about $248 million in cannabis taxes in the first quarter.
Last year, licensed California retailers reported $3.9 billion in cannabis sales, down from $4.2 billion in 2024.
That marked the third consecutive year of declining sales in the nation’s largest cannabis market. In 2023, sales totaled $4.4 billion.
Many in the industry blamed the 2025 decline on an excise tax that took effect July 1. But because the tax was repealed by Oct. 1, it does not account for the decline in sales during the fourth quarter or the first-quarter 2026 sales drop.
Which cannabis products are selling most?
Across the four most popular product categories – vapes, packaged eighths of flower, infused pre-rolls, and edibles – retailers reported selling 36,378,848 units in the first quarter, according to the DCC.
That’s down slightly from the 36,891,966 units sold in those product categories in the same time frame last year.
Vape products were the biggest sellers during the quarter, continuing the nearly yearlong trend of outselling flower in the state.
Vapes accounted for $350.8 million in sales, compared to $312.8 million for flower, according to the DCC.
Pre-rolls ranked a distant third with $184.51 million in sales, according to DCC data.
That bucks a national trend that saw pre-rolls outsell any other cannabis category. Pre-roll unit sales in the U.S. grew nearly 20% last year. Pre-rolls generated $3.6 billion in sales in 2025, a nearly 10% increase from 2024, according to data from cannabis analytics firm Headset.
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How much is the illicit market hurting legal cannabis sales?
California’s legal cannabis industry remains under pressure from the illicit market, with increased seizures last year pointing to continued demand for lower-priced marijuana sold outside of licensed stores.
“I think it’s a market in transition from a longstanding, decades-old illicit market into a legal space,” DCC Director Clint Kellum told MJBiz Daily in February.
