Why California Hasn't Had the Massive Cannabis Boom Everyone Expected

When California finally began allowing recreational marijuana sales last January, many expected the state to see a massive cannabis boom. However, one year later and that boom hasn't quite come to fruition, and there are several reasons why.

California cannabis businesses have a whole list of reasons why they haven't seen the boom many expected. Primarily, it comes down to overly complex regulations, high taxes and local governments banning marijuana dispensaries that are stunting the industry's possible growth. 

“The cannabis industry is being choked by California’s penchant for over-regulation,” said Dale Gieringer, director of California NORML. “It’s impossible to solve all of the problems without a drastic rewrite of the law, which is not in the cards for the foreseeable future.”

The state is definitely aware of these issues. California projected they would bring in $630 million in marijuana tax revenue in 2018. But it appears that number will actually be around $471 million, a significantly lower amount. Considering California hopes to bring in $1 billion of annual tax revenue from cannabis, some changes need to be made to help facilitate that growth. 

The biggest issue, however, is local governments. Only 89 of California's 482 cities allow marijuana sales. And while most of the larger cities (Los Angeles, San Francisco, San Diego) in the state do allow cannabis sales, there's still a huge number of California residents who live in areas where marijuana sales are not allowed. And even in cities where they are allowed, local government's are stifling possible sales by imposing high taxes on cannabis sales on top of the state's already high sales tax.

The expectation is that incoming Governor Gavin Newsom and the California legislature will need to spend 2019 finding ways to lessen the burden on California's marijuana industry and help promote growth.

(h/t LA Times)


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