California’s looming legal recreational marijuana market eventually will total more than $5 billion in annual sales, but the black market will continue to provide substantial competition, according to a study by the University of California Agricultural Issues Center.
Contracted by the the state’s Bureau of Marijuana Control, the study mirrors Marijuana Business Daily’s projection in May that California’s legal rec industry eventually will generate $4.5 billion-$5 billion in annual retail sales.
The university’s study forecast that legal recreational sales will make up 61.5% of California’s total marijuana market and legal medical marijuana about 9%, according to the Los Angeles Times.
However, black market cannabis sales will likely account for 29.5% of the market as consumers continue purchasing illicit marijuana – at least initially – so they don’t have to pay extra costs stemming from the testing and tracking of legal marijuana, as well as the 15% state tax rate.
Medical marijuana sales accounted for about a quarter of California’s $7.7 billion annual yield from the combined legal and illegal marijuana markets through last November. However, the study estimated the state’s legal rec market will reduce MMJ sales from $2 billion to $600 million.
California’s regulations for the adult-use and medical marijuana sectors are expected to be in force by January 2018. Once the industry is up and running, the study found, the rec industry alone will generate more than 1,200 jobs in testing and handling the plant.