California retail cannabis sales held steady in the second quarter at $1.013 billion – only slightly more than the $1.006 billion reported for the same period a year ago, according to state data.
The slight gain suggests the state’s legal market may be finding steadier footing after several quarters of decline.
The second quarter also was an improvement over the first, when retail sales came in at $963.9 million, according to the California Department of Tax and Fee Administration.
How much cannabis tax revenue did California collect?
Across the four most popular product categories – vapes, packaged eighths of flower, infused pre-rolls, and edibles – retailers reported selling 39.1 million units in the second quarter, according to the state’s Department of Cannabis Control.
That’s up slightly from the 38.5 million units sold in those product categories in the same time frame last year.
Second-quarter sales performance translated into $261.7 million in state sales tax revenue, compared to $263.9 million a year earlier.
Peak sales are well in the past. Quarterly retail sales hit $1.138 billion in the second quarter of 2023, then drifted lower through 2024 and into early 2025 with several quarters falling below $1 billion.
How did California’s repealed excise tax affect retail cannabis sales?
A since-repealed excise tax increase that went into effect July 1, 2025, may have contributed to the decline in sales. But even after the tax hike was repealed Oct. 1, fourth-quarter sales were still significantly lower than the same period a year ago, according to the CDTFA.
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The 2026 second quarter marks the second consecutive quarter above that threshold.
California’s legal cannabis market has generated more than $16 billion in cumulative retail sales since launching in January 2018, according to CDTFA. The state remains the largest legal cannabis market in the country by retail sales volume.
Licensed cannabis stores continue to compete against a persistent illicit market that regulators and industry groups have long cited as a drag on legal retail performance.
