California’s cannabis industry is exploding but it looks like recreational cannabis has to wait in January 2018.
In San Francisco, California city permits to sell recreational marijuana will not be issued until is passes new laws to regulate the industry and create a program for the under privileged in the industry and regulations to squash the black market.
According to San Francisco Mayor Ed Lee:
Out of a 70-page ordinance, less than a page talks about how to make (the industry) equitable, the laws are far from perfect, and further from final,
and will require a lot more work.
On the other side of the coin, California’s cannabis market is expanded making over $375 million in one quarter alone, from millennials to baby boomers the average person spends per month is $150 or cannabis terms about an ounce a month on flower, not including edibles or CBD products.
In wholesale terms, per pound prices started the year at $1413 per pound and peaked to $1724 – in line with the the average price in the US averaging $1600.
Although demand is high and prices have dropped as seen in states of Colorado or Washington, the California market will still have one of the highest prices per pound due to the expensive operating costs to remain compliant, especially heading into 2018 with even more regulations for cultivators to operate in.
As new rules come into place the market will disrupt:
Jonathan Rubin, CEO of CannabisBenchmarks:
The historical lack of stringent tracking and reporting in California’s medical cannabis program has allowed the black market and legal market to essentially maintain an equilibrium, with supply and demand shifting between the two to maximize revenue for sellers and minimize price for buyers.
Which makes it more enticing for the black market to remain in the state by giving access to cheaper pricing points than licensed dispensaries can offer.
When new compliance and regulations do pass in California, the market is estimated to be worth the $5 billion – thats just one state.