Despite a series of obstacles and setbacks, California’s legal marijuana market is on track to continue growing in the coming years, according to a new report.
By 2024, cannabis sales growth in the Golden State will account for nearly a quarter of all sales growth in the United States, according to a report, “From Dispensaries to Superstores: Opportunities in U.S. Cannabis Retail,” issued by BDS Analytics and ArcView Market Research.
California voters legalized recreational use of marijuana in 2016, with sales becoming legal on Jan. 1, 2018. The Golden State has had a rocky transition to the legal recreational cannabis market.
State lawmakers and regulators alike have sought to fix shortcomings in the 2016 law, from addressing the need for marijuana companies to access banking to preventing the sudden expiration of licenses for thousands of cannabis growers.
“While that market has faced initial difficulties as the industry and regulators dealt with the headaches of a new, untested regulatory scheme, rigorous new testing requirements, heavy compliance and tax burden and some slow-moving licensing jurisdictions, retailers in the state still managed to generate more than $2.5 billion in sales,” according to the report.
In the next five years, that amount could increase by $4.7 billion, the report forecasts, accounting for nearly a quarter of the predicted $20 billion in additional sales nationwide.
While California will continue to be a lucrative market for cannabis retailers in the near term , it will also be a competitive one, the report says.
With California now allowing cannabis companies to deliver their product anywhere in the state, regardless of local ordinances, the report predicts those local jurisdictions will “get over their qualms in pursuit of tax revenue” and become more likely to approve license applications.