The State of California’s Cannabis Industry in 2020
Since the legalization of cannabis in California, we’ve seen the major impacts it’s had on residents, jobs, and the overall economy. 2019 saw some drastic changes in the way cannabis is taxed and regulated, causing huge shakeups on the industry including the loss of more than 8,000 jobs that were previously considered legal. Despite this, 2020 is shaping up to be the bounce-back year for the cannabis industry in California.
In 2019, tax revenues increased by more than 60 percent up to an estimated $305.30 million. With that, more than 600 stores are now open in the state, with 300 new stores expected to open in 2020. More than 5,400 licensed farms currently operate within California, ensuring that legal supplies continue to flow into the market without pause.
Dispute legal cannabis growing in popularity, the number of shops is still outnumbered by liquor stores 21-to-1. Compared to the state’s 600 cannabis stores, California has over 13,000 liquor stores. While the popularity of cannabis hasn’t yet reached critical mass early on, many proponents are confident that, as the years pass, the industry will continue to progress.
When legalization came, the cannabis industry went from zero regulations to a massive amount of regulations. Today, the industry is regulated by at least 10 state agencies, with high-taxes creating a barrier to entry for all but the most successful shops. This coupled with the widespread prohibition of cannabis businesses in local municipalities, contributed to a decline in 2019. This, however, is starting to change, with more cities and counties working to compete in bringing more cannabis revenue to their jurisdiction.
Ine service that is seeing continual expansion is cannabis delivery companies. With retail stores banned across more than 50 percent of the state, cannabis delivery services are experiencing a boom in demand. Eaze is one of California’s most well-known delivery services, often hailed as being the UberEats of cannabis. Ganja Goddess is another popular service that promises the delivery of legal cannabis to addresses in nearly every town in California.
While we are still in the very early stages of a legal cannabis market, the industry is showing promising signs of continuing to be a major economic benefit to the state of California. In the coming years, we should expect even more jobs brought into the state thanks to cannabis companies continuing to innovate in this fledgling industry.