California Market Report: Illicit Market Woes

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In the two years that recreational marijuana has been legal in California, success in reducing and eliminating the illicit market has been lackluster, due in part to new state and local regulations, new taxes and a supply chain that is still finding its footing.

It’s not as though this huge illicit market popped up overnight when legal sales began in January 2018. Rather, it evolved over decades. As of February 2020, the state’s Bureau of Cannabis Control had roughly 2,500 open investigations into reported illegal marijuana shops and delivery services.

The end of 2019 gave way to a disturbing trend, with many legal operators laying off employees, widespread reports of unpaid vendor bills and broad financial distress that created negative ripple effects up and down the supply chain. And much of this can ultimately be traced back to the illicit market.

California businesses must now find the right business formula to tap the incredible amount of demand for quality marijuana products. The answer is a combination of factors, including overcoming competition from illegal operators.

In this report, MJBizDaily provides a macro perspective on how the illicit market is contributing to the underperformance of the legal market.

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Topics in this report include:

  • Marijuana sales from 2018, with projections through 2023
  • Comparison to other states’ marijuana sales in year two
  • Overview of the drivers of California’s thriving illicit market
  • Analysis of the effects of the illicit market
  • What to watch in California

MJBizDaily is proud to offer this report, free to our subscribers.

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