Data from the Cannabis Tax and Fee Administration (CDTFA) shows a steady decline in cannabis tax revenue in California over the past four years, according to a report from the Press Democrat.
In the second quarter of 2024, cannabis tax revenue dropped to $263.1 million, down from $361.4 million in Q2 2021. This marks the fourth consecutive year of declining revenue, reflecting a broader trend in the state’s cannabis industry.
Similarly, taxable cannabis sales in California have also been on the decline. Sales dropped from $1.5 billion in Q2 2021 to $1 billion in Q2 2024, highlighting a significant downturn.
Several factors contribute to this ongoing decline, including stringent state regulations and increased competition from both the unregulated market and hemp-derived THC products. In response, California Gov. Gavin Newsom (D) recently introduced emergency rules targeting hemp product retailers. The new regulations aim to ban intoxicating hemp products by requiring no detectable levels of THC in all hemp-derived products sold in the state, a move intended to protect minors from dangerous products.
In a related development, state lawmakers have passed a bill allowing cannabis consumption lounges, though Gov. Newsom vetoed a similar proposal last year.
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