About 170 years after California’s gold rush came the promise of the green rush.
California’s legalization for adult recreational use was expected to be massive. In 2016, industry investors claimed sales could top $6.5billion by 2020. As 2019 comes to a close, California is indeed home to the world’s largest cannabis market, totaling close to $12billion in estimated sales. But here’s the rub: $8.7billion of that is changing hands in the illicit market.
Now members of the California Cannabis Industry are sending an SOS to the state capital, saying their struggling to compete against black market operators who don’t have to meet stringent regulations or pay raves and fees. They’re urging leaders to make swift regulatory changes or risk the collapse of their emerging industry.
“The hawked truth is that until legislative changes are made, our industry will continue to wither away,” said Michael Steinmetz, CEO of Cannabis distributor Flow Kana, which recently joins a growing list of California cannabis firms hay have cut their workforces.
Following the job cuts, which were the first reported by the Sacramento Bee and described as an “epidemic” of layoffs. Steinmetz cobbed together an informal coalition of more than a dozen leading companies and business associations to lobby the states.
“This is a massive opportunity for the state,” Steimetz said. “I think it could dwarf the size of the wine industry.”
Although California wasn’t the first state to legalize and start adult-use cannabis sales. It’s quickly become home to the largest recreational cannabis industry in the world, according to a report from Archview Market Research and BDS Analytics, which track and analyze cannabis point-of-sale transactions.
In 2019, California’s sales are expected to top $3billion, which is more than combined output of the more mature markets of Colorado (1.6billion). By comparison, Canada’s recreational cannabis industry is expected to hit $1.1billion this year.
But those sales pale in comparison to the $8.7billion illicit market in California, according to Archview and BDS Analytics Protections for 2019. In 2018, California’s illicit sales were an estimated $8.99billion