Legal California Marijuana Sales Decline in First Quarter

The state recorded the lowest level of sales since Q2 2020.

California’s legal marijuana market continues to struggle, if the latest tax and sales numbers from the state Department of Tax and Fee Administration are any indication.

The state pulled in $216 million in the first quarter of 2023, the agency reported this week, on $1.2 billion in taxable sales.

Both figures are down sequentially for the quarter. And it’s the lowest level of sales made in a three-month period since the second quarter of 2020. It’s also the lowest level of state cannabis taxes collected since the final quarter of 2019, according to the CDTFA.

The sales decrease of almost $94 million, or 7.5% from the prior quarter, is almost $50 million below the worst quarter of last year.

The slide extends a trend that began in the final half of 2022, when sales took a downturn for the first time since the launch of the legal recreational cannabis market in 2018.

The news comes as California faces continued market contraction, price compression, and ongoing competition from the illicit market, which licensed businesses have complained about for years as a major threat to their long-term sustainability.

The tax downturn also follows news that 13% of retailers missed a May 1 deadline to remit cannabis taxes under a new policy that went into effect in January, under which retailers are responsible for collecting and remitting the state cannabis excise tax. Previously, that job was on distributors.

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.


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