California’s legal cannabis industry has struggled to compete with the state’s unregulated market in recent years. The 2024 Q1 sales totals in California are the lowest since the second quarter of 2020 when total sales were roughly $1.1 billion. Sales totals peaked in California in 2021 Q2 when the state’s legal cannabis industry sold over $1.5 billion worth of products.
High taxes are often blamed for the industry’s struggles, and at least one city in California is trying to combat it head on. Cannabis taxes in the Southern California city of Long Beach were recently lowered by 1%, and cannabis businesses in Long Beach may be eligible to receive an additional 3% reduction.
“The 1% cannabis tax reductions will apply to cultivation and adult-use cannabis retailers. This reduction went into effect on May 24.” stated NBC Los Angeles in its original reporting. “Businesses will have the additional opportunity to apply to the Pilot Tax Credit Program to receive an additional 3% cannabis tax reduction.”
Below is the criteria that the City of Long Beach will consider when granting the additional 3% tax reduction:
- Business must be in “good standing”
- Employees must be hired locally
- Pay 80% of employees 115% or above the state minimum wage, and the rest of the employees 110% or above the state minimum wage
- Proof of participation in a High Road Training Partnership
- Either have 15% of their products on display be from an equitable distribution, or provide 50 hours minimum per year of incubation support to equity businesses
- Submit official payroll records and EDD’s DE9 and DE9C quarterly
“Prior to this cannabis tax reduction, Long Beach charged a 6% excise tax on medical cannabis purchases and an 8% tax on recreational purchases. These taxes are additional to the city’s regular sales tax of 10.25% and the state’s 15% excise tax.” reported NBC Los Angeles in its coverage.
The United States adult-use cannabis industry has generated over $20 billion in total tax revenue since the first legal recreational cannabis purchase was made in Colorado on January 1st, 2014 according to a recent report by the Marijuana Policy Project.
“Through the first quarter of 2024, states have reported a combined total of more than $20 billion in tax revenue from legal, adult-use cannabis sales. In 2023 alone, legalization states generated more than $4 billion in cannabis tax revenue from adult-use sales, which is the most revenue generated by cannabis sales in a single year.” the Marijuana Policy Project stated in a press release.
Total legal cannabis sales in the United States are expected to reach $31.4 billion in 2024 according to a recent analysis by Whitney Economics. Additionally, leading cannabis jobs platform Vangst, in conjunction with Whitney Economics, estimates that the legal cannabis industry now supports 440,445 full time-equivalent cannabis jobs in the United States.
Whitney Economics also projects the following legal cannabis sales figures in the United States for the coming years:
- 2024: $31.4 billion (9.1% growth from 2023)
- 2025: $35.2 billion (12.1% growth from 2024)
- 2030: $67.2 billion
- 2035: $87.0 billion
The emerging legal cannabis industry in the United States is projected to add roughly $112 billion to the nation’s economy in 2024 according to a newly released analysis by MJBiz Daily. The projection is part of the company’s 2024 MJBiz Factbook.
“The total U.S. economic impact generated by regulated marijuana sales could top $112.4 billion in 2024, about 12% more than last year,” MJBiz stated in its initial reporting.