California regulators released a report this week that predicted continued growth in the cannabis industry. However, the state’s sales data for the quarter ending December 2024 shows the worst performance of the quarter since nearly five years. Legal sales are at their lowest level since the first three months of 2020.
California dispensaries only sold $1.027 billion of cannabis legal in the fourth-quarter, down from $1.16 and $1.28 billion respectively, according to the statistics of the Department of Tax and Fee Administration.
Sales are at their lowest level since California stores sold $877.7 millions in the first three months of 2020. This was before the COVID-19 epidemic gave the industry a “essential status” and provided a financial boost for several years due to the stay-at home orders and stimulus checks from the government.
In the second half of 2021 sales reached $1.5billion and since then have declined, with a few quarters showing a slight uptick.
According to a report issued this week by the California Department of Cannabis Control, legal cannabis production increased in 2024 by almost 12%, which gave ERA Economics – the author of the industry study – cover to assert that the legal market is still growing and performing well.
However, the report found that this industry is still experiencing a contraction. Legal cannabis companies only hold about 40% market share in total while underground marijuana producers continue to dominate 60%. The report also found that these figures had been static for three years and the illicit market has made little progress since 2021.