By Miriam Raftery
May 22, 2018 (San Diego) – Pot sales in California have not yet been a jackpot for state revenues since legalization of recreational cannabis in January. New Frontier Data, a data analysis firm, has lowered their projections for legal pot sales this year in California from $3.8 billion to $1.9 billion – or only half what was projected.
So why are fewer Californians buying legal weed that anticipated?
Even though it’s now legal to use and grow up to six plants statewide, the new law allows each city and county to make their own rules on whether or not to allow commercial growing, distribution and sales.
Most cities have opted to ban all marijuana businesses, as is the case in the East County cities of Santee and El Cajon.
Statewide, only about 70% of cities allow any form of marijuana businesses. But some still ban recreational sales, deliveries, and cultivation even while allowing some storefront operations. Even cities that allow cannabis sales often have stringent rules that make it costly and difficult for start-up businesses.
The City of San Diego has been among the most expansive in allowing both recreational and medical cannabis businesses to flourish. Lemon Grove and La Mesa have voter-approved initiatives that allow only medical marijuana dispensaries, not recreational---but not a single legal dispensary has opened up yet, due to the lengthy approval process.
The County has outlawed all future marijuana businesses in unincorporated areas, giving existing licensed businesses five years to phase out. But that could change after the current supervisors leave office due to term limits, if newly elected members believe its high time to reap revenues from taxing cannabis and/or believe access should be provided for voters who have spoken.
Difficulty in purchasing legal marijuana means many consumers are being forced to turn to the black market, says Amy Jenkins with the California Cannabis Industry, the Los Angeles Times reports.
As applications for legal businesses work their way through the pipeline in cities where cannabis businesses are legal, the industry is expected to bloom, generating an estimated $4.72 billion by 2025, New Frontier Data now predicts.
Elections could also be decisive factors, if cities that have taken a prohibition approach to pot wind up with new councilmembers or supervisors willing to approve cannabis businesses – or if voters take matters into their own hands with ballot initiatives to legalize what elected officials won’t. On the other hand, if liberal-minded legislators are replaced with anti-cannabis officials, the prospects of expanded access could go up in smoke.