California was the first state to allow medical marijuana. Now, two decades later, voters are expected to be asked whether to legalize recreational use of the drug. The legalization measure headed for the statewide November ballot is the product o Meta Viers McClatchy
California was the first state to allow medical marijuana. Now, two decades later, voters are expected to be asked whether to legalize recreational use of the drug. The legalization measure headed for the statewide November ballot is the product o Meta Viers McClatchy

California Weed

Pot research firms say Prop. 64 would spike weed sales

By Peter Hecht

phecht@sacbee.com

August 24, 2016 04:35 PM

Two groups studying the cannabis economy say legalizing recreational marijuana in California will provide a $1.6 billion boost in revenue from expanded retail marijuana sales.

The projections on California’s Proposition 64 legalization measure in November come from two firms with a vested interest in expanding the marijuana business. The market study was completed by New Frontier Data, a Washington, D.C., firm conducting cannabis market research, and the ArcView Group, an Oakland organization specializing in attracting investment for marijuana businesses and legalization causes.

Earlier this year, New Frontier and ArcView Market Research collaborated on a report, The State of Legal Marijuana Markets, that valued at $2.7 billion California’s existing medical marijuana market of retail cannabis dispensaries, marijuana, food processing kitchens, laboratories and other businesses in 2015. By comparison, the state Board of Equalization in 2010 estimated marijuana dispensary revenue at up to $1.3 billion based on estimated state sales taxes.

Now the cannabis research firms’ 2016 California Legal Cannabis Market State Profile says legalizing marijuana for adult social use would grow California’s marijuana market by 18.5 percent a year once dispensaries are fully operational selling marijuana products to both medical and nonmedical users, likely in 2018. The cannabis industry research firms say the California market then would grow to $6.46 billion by 2020.

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The report, on sale for $249, and its executive summary, free for download, offer other interesting conclusions about the state of marijuana in the Golden State.

The report suggests that California will require 1,500 to 2,200 acres of cultivation to satisfy marijuana consumer demand. At the same time, it says the market is likely already over-saturated with pot produced for the current medical marijuana market as well as illicit sales in the black market in the state and beyond. The research underscores the likelihood that the out-of-state black market for California pot will continue to thrive in ensuing years even if voters pass Proposition 64.

Citing national drug survey data, the report also says marijuana use in California is highest in San Francisco and far Northern California counties, with the rate of personal pot use jumping in Mendocino, Lake, Colusa, Butte, Plumas and Lassen counties. Sacramento Bee research, tracking federal estimates for annual marijuana use, found that high weed use also occurred in counties encircling the capital city.