San Francisco cannabis report: Consumption to spike, prices to plummet

The amount of legal marijuana consumed in San Francisco could triple – to 30 million grams per year – after California’s recreational market launches in January, but cannabis prices will fall “dramatically,” according to a new report.

A draft tax report compiled by the City Controller’s office showed that once recreational sales begin, total regulated cannabis consumption is expected to increase to 18 million-30 million grams, according to the San Francisco Examiner.

By contrast, the city’s 45 city-permitted medical marijuana dispensaries or delivery services currently sell about 10 million grams of cannabis annually, the newspaper reported.

San Francisco’s legal adult-use program could generate $130 million-$240 million in annual sales, the report determined.

But the price of cannabis could fall from its current rate of $14 per gram to about $7-$8.

San Francisco Mayor Ed Lee signed the city’s recreational cannabis regulations into law last week, one day after the Board of Supervisors approved them.

2 comments on “San Francisco cannabis report: Consumption to spike, prices to plummet
  1. George Bianchini on

    lets take a look at that, the new cultivation tax is $148 per pound plus two bucks a foot tax for local permits to cultivate. Then you have about 25% markup for manufacturing as well as distribution. Plus the industry can’t squeak by on the 280e tax meaning about an additional 25 to 50% markup needed by dispensaries who will have no choice but to pay 100% of taxes owed.
    These are just the big ones. For a base wholesale price that will enable a cultivator to survive, I estimate the cost per gram with our new prop 64 scheme to amount to about $3 a gram. By the time it goes through the system you can add the manufacturing, testing and distribution cost to add another $2. Then the retailer, who keystones (doubles) the wholesale cost will most likely need to add another 25 to 50% to cover the massive regulatory and tax requirements. My guess is that we will see an average retail price of $15 a gram and $50 eights, and that’s for average cannabis.
    And that’s the way I see it.

    Reply
  2. will on

    I agree with George the additional cost comply will be passed on the to consumer, or cultivators simply won’t comply or continue to grow.

    Reply

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