With tax revenue from legal pot sales in California falling short of projections, a financial analysis firm estimated Tuesday that total sales this year will be $1.9 billion, significantly less than \the $3.8 billion the company expected.
The firm, New Frontier Data, had also estimated that total sales in California would reach $6.7 billion by 2025, but now says it is more likely the industry will generate $4.72 billion by then.
Most cities in California have refused to allow pot businesses, and there are tough rules for those who want state licenses to grow, distribute and sell marijuana. Both are to blame for the lower-than-projected sales, according to Giadha Aguirre De Carcer, chief executive of New Frontier Data.
Only about 30% of California’s 540 cities and counties have authorized some form of commercial cannabis activity, according to Amy Jenkins, a spokeswoman for the California Cannabis Industry Assn. That, she said, is “forcing consumers to turn to the illicit market.”
New Frontier Data’s report could boost pending legislation that would lower the state excise tax on marijuana sales from 15% to 11% to make it more appealing to Californians who are still buying cannabis on the black market.
By: Patrick Mcgreevy, LA Times