California marijuana sales a far cry from state’s projections

California is paying a price for the shaky rollout of its legal recreational marijuana market.

State budget documents show Gov. Gavin Newsom’s administration is sharply scaling back what it expects to collect in cannabis tax revenue through June 2020 – in all, a $223 million cut from projections only four months ago.

The state projects the 15% cannabis excise tax will pull in $288 million for the fiscal year that ends in June and $359 million the following year. Those are cuts of $67 million and $156 million, respectively, from the governor’s January budget forecast.

The diminished optimism for retail cannabis sales comes as a thriving illicit market continues to undercut licensed shops, where consumers can avoid taxes that can approach 50% in some communities.

Meanwhile, state regulators have struggled to meet the demand for licensing, and many communities have either banned commercial marijuana sales or not set up rules for legal cannabis businesses to operate within their borders.

It now appears certain California will fall short of earlier projections, when officials expected to collect $1 billion in new tax revenue annually from marijuana within a few years of the program’s launch.

The state Finance Department said it reduced the excise tax projection based on the marijuana industry’s lack of growth in the final quarter of 2018 and the limited number of places where legal cannabis companies are allowed to operate.

– Associated Press

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8 comments on “California marijuana sales a far cry from state’s projections
  1. richie rich on

    Wise to cut the tax! Cut regulatory hurdles too. Cut category 3 too!


  2. MICHAEL on

    The number of illicitly cultivated cannabis is now 10 times that of legal cannabis. Government departments should take various measures to crack down on illegal operators.

    • Pat on

      Where did you get your numbers? Govt. Depts. should first crack down on themselves for allowing it to get to this. The Govt. has almost everything ( negatively ) to do why things are they way they are now. The whole thing is mismanaged by the Govt.

  3. Pat on

    How is it that Canada has already studied and published the results of the illicit market in its country and Ca. has not? Canada’s black market stands at a projected 75% of cannabis market share. Hmmm… I wonder where that number stands in Ca? You mean the state of ca. STILL doesn’t know?? Of course it does.

  4. NikF on

    Until there is a crackdown on the smaller and illicit outfits, i.e. the ones without licenses, the state will not see the revenue it was looking for. Since the Northern California entities have been allowed to operate, the problem has been compounded. Enforcement is either afraid to or is on the take not to.

    Either way, Sacramento can just wipe the tears and suck it up since they won’t do anything but complain about it. Free up more licenses too, that should help competition.

  5. Fred on

    Taxes aren’t high enough. The white business owners are already rich why people of color are behind bars. I say raise taxes to aid equity applicants.

  6. Uncle Pope on

    The excise tax in Cali is dictated and calculated by Alcohol and big Pharma to guarantee cannabis will fail in the long and short.
    Cali..the most corrupt state coast to coast.
    Support the black market!!!

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