By Patrick McGreevy
California is on track to post a record $3.1 billion in licensed cannabis sales this year, solidifying its status as the largest legal marijuana market in the world, according to a study released Thursday by financial analysts who advise the industry.
Legal sales are up significantly from an approximate $2.5 billion in 2018, the first year of licensed cannabis sales in California, according to the analysis by sales-tracking firms Arcview Market Research and BDS Analytics. After a rocky start in 2018, retailers that have survived California’s tough licensing, testing and packaging regulations are “battle hardened” and stronger because of an influx of investment that has allowed them to take advantage of the state’s large population and pent-up demand for legal products, said Tom Adams, managing director and principal analyst for BDS Analytics.
“Any market in the world would be ecstatic about a 23% growth rate,” Adams said. “That is fabulous for any industry to have that kind of growth.’’
But California’s black market for marijuana continues to flourish as high taxes and a refusal by most cities to allow licensed shops makes it cheaper and easier for people to buy from illicit dealers, he said. An estimated $8.7 billion is expected to be spent in the illegal cannabis market in 2019 — more than double the amount of legal sales.