California is a market worth less than $5 billion today (and it’s shrinking). The state has the lowest sales per capita of any mature market .”
Ananda Strategy by Hirsh JAIN
The Department of Cannabis Control , which is now in its seventh year of selling adult-use marijuana in California, announced with some fanfare in late February that it has launched a series of “interactive dashboards”, which would allow the public access to information about harvests, retail sales, licensing and sales on the cannabis market in the state.
After a briefing by the DCC with reporters from the cannabis industry, some claimed that the new dashboards had “changed the game” with their launch.
On closer inspection, the DCC did what most cannabis regulators have done shortly after the launch of their cannabis markets: they provided the public with regular updates to basic data about the state’s marijuana market. This is arguably the most basic responsibility a regulator can have. The DCC also acknowledged that the dashboards would not include data for 2018, 2019, and much of 2023. They will only be updated every three months, rather than monthly, as many states do.
The dashboards of the DCC, despite their obvious limitations, revealed a truth that is now indisputable: the California (legal) cannabis market was much smaller and weaker then we had thought. According to the DCC’s dashboards, California had legal cannabis sales of $4.9 billion dollars in 2022 and is on track to have even lower numbers in 2023. California, which is often misrepresented in the media (and shrinking) as a market worth $6 billion in cannabis, is actually less than $5 billion today. California has the lowest cannabis sales per capita of any developed market. California’s legal cannabis market would generate $13 billion annually if it performed on par with Michigan or Montana.
California’s struggle is due to a multi-layered, highly punitive tax system that prices out most cannabis users from the legal market. This system views the legal cannabis market as a “piggybank” that is meant to subsidise specific non-profits or interest groups. In return, these groups provide political support to the state’s elected officials. It is not surprising that these leaders are often unwilling to be accountable for how cannabis tax revenues are spent.
The state legislature and Governor Gavin Newsom, despite the fact that there is ample evidence to suggest that the tax system in California fuels an illicit cannabis market that is violent, putting the residents of the state at risk, have shown a reluctance to anger the groups that they consider as allies, or as the administration calls them, “revenue-recipients,” in order to achieve their aspirations. This explains why California’s cannabis tax will increase from 15 to 19 percent in 2025. Insanity.
In recent months, Elliot Lewis has become a social media phenomenon for his brash criticisms of California’s cannabis regulation. Lewis’s rhetorical style may offend some members of California’s politically-minded class, but that misses the point. His message resonates with both industry professionals and consumers. Lewis exposes the hypocrisy that is exhibited by a political class that claims to be concerned about racial and economic justice but in reality only cares about their own agenda.
Catalyst’s recent lawsuit against the state, which was filed because it overtaxed “cannabis accessory” items, seems to be one of the only practical ways to combat California’s brazen oppression towards its legal cannabis businesses. A 2026 statewide initiative to lower cannabis taxes may be the only option, which would allow Californians to take control of their own destiny rather than being controlled by a state legislator.
Presumably, California’s cannabis taxes helped fund the “many” months of work required by the DCC to create its new dashboards. The DCC should be commended for its (however late) attempts to provide some transparency. The DCC claims that they “validated data to an extremely detailed level in order to ensure that we had confidence in the information we were displaying.” But, despite this claim, errors that are familiar to those who closely follow the California cannabis industry still remain.
As of February 25, DCC’s Cannabis License Summary Report dashboard indicated that California had 1,240 Retail Storefronts. This data comes from the notoriously inaccurate License Search database of the DCC, which includes dispensaries who received state licenses in the past but have not opened as part of California’s 1,240 dispensaries.
The DCC’s Locate Retailers Near Me Tool indicates that there are only 9 dispensaries in San Jose when there are actually 14. The DCC’s Find Retailers Tool also indicates that there are five dispensaries in Tracy when there are actually only two. These and other errors are common in the DCC licensing database. This casts doubt on any dashboard which, however elegantly summarizes this inaccurate data.
There is still much to do to build public confidence in the DCC’s data. We can only hope that some of the DCC’s large, sprawling bureaucracy is up to the challenge. It will be more difficult to get the political leaders of the state to stop prioritizing short-term interests over those of the people they govern.
Newsom will have a lasting legacy, if he does not make a drastic course correction. He allowed the once promising cannabis market in California to degenerate into chaos and violence. This was because he put the interests of groups that were important to his political career ahead of the needs of the people he was elected for. Ironically, that could not be a good thing come November 2028.
Hirsh began his cannabis activism at the age of 17 when he was appointed Cannabis Lead by the Public Defender’s Office at UC Berkeley. He is now the CEO of Ananda Strategy – a consulting firm that works with many of California’s top cannabis brands and retailers.
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