California’s cannabis market is widely known as the largest in the United States, bringing in ginormous numbers each year. But just because they sell a lot of weed doesn’t mean everything is working smoothly. California has their own share of ups and downs within the market. As of 2022, many experts believe the regulated industry is struggling. Here are just a few of the reasons why.
- An imbalance between supply and demand
- Wholesale price compression
- A declining market share for weed
- High taxes
- A thriving illegal black market
Although the cannabis sector is growing in California, monthly sales are slowly declining. In April of 2021, monthly cannabis sales were at $475 million. In February of 2022, sales dipped to $402 million. New complex regulations also are playing a large role within the industry. These regulations are making it hard for new businesses to come into play, repressing newcomers in the market.
California officials have announced they are looking to stimulate the market to encourage more growth, but locals are worried. Some are even going as far as moving their businesses elsewhere with less regulations and taxes.
East coast markets are growing at rates well above California levels, forcing government officials to make moves. More updates on California’s cannabis market to come.