Despite a rosy cannabis industry report issued this week by California marijuana regulators that projected ongoing growth, state sales figures for the fourth quarter of 2024 show the market had its worst quarterly performance in nearly five years, with legal sales at their lowest since the first quarter of 2020.
California dispensaries sold just $1.027 billion of legal cannabis in the fourth quarter, down sequentially from $1.16 billion and year-over-year from $1.28 billion, according to statistics from the state Department of Tax and Fee Administration.
The sales are the lowest since California shops sold $877.7 million in the first quarter of 2020, before the COVID-19 pandemic gave the industry “essential” status and a multiyear financial shot in the arm due to stay-at-home orders and government-backed stimulus checks for consumers.
Sales peaked in the second quarter of 2021, at $1.5 billion and have been trending downward since then, despite a few quarterly upticks.
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.
But the report also noted that the industry has been weathering ongoing contraction and estimated that legal cannabis companies have only garnered about 40% of the total marijuana market, while the underground still holds 60% market share of the entire state. In addition, the report found those figures have been stagnant for about three years, with the legal market having made essentially no gains since 2021 against illicit operators.
[[{“value”:”Sales in the largest regulated cannabis market have been trending downward since 2021.
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