California’s cannabis culture has been leading the pack nationwide for many years, and now that its recreational use has been legalized the state is expected to become king of the crop.
January 1, 2018, heralded a new era of legalized pot smoking and ushered in a burgeoning growth market that is expected to inject about $1 billion in tax revenues into California state coffers.
According to a recent report by BDS Analytics, legalizing pot is expected to land California substantial financial windfalls which will include:
—–> A $3.7 billion cannabis market by the end of 2018.
—–> By 2019, cannabis sales are expected to reach 5.1% billion, rivalling the sale of beers.
—–> Tax revenue of $1.4 billion by 2021.
Reasons why California will become the epi-center of the US cannabis market
According to David Argudo, the CEO of High Hampton Holdings in the state, there are several reasons why California will become king of the crop.
These are :
—–> An entrenched cannabis culture
—–> A huge population
—–> A well established medical cannabis market dating back to 1996
—–> Fast-growing baby boomer population
—–> An increasingly attractive tourist destination
California’s population numbers close to 40 million people, while its medical cannabis market has a patient-base of about one million. Furthermore, there are an estimated 1 000 legal medical cannabis dispensaries servicing customers throughout the state.
California also boasts the largest baby boomer population in America, with a growth rate 35 percent above the national average.
Legalizing recreational pot will undoubtedly make California an even more attractive tourist destination. The west coast state is already one of North America’s most popular tourist destinations, with an average of 260 million visitors who spend $122 billion in the area every year.
According to a report published by the University of California Agricultural Issues Center, tourists spend about $7.2 billion annually and California wines.
The report points out that a significant portion of tourist expenditure is on leisure goods and services, and now that pot can be smoked openly California could become attractive to more “weedsters”. This is based on the fact that cannabis for recreational use by adults is still illegal in most other American states, and that an increase in tourism was experienced in Colorado as soon as recreational use was legalized.
California’s cannabis culture
California has an entrenched cannabis culture because it became the first state to legalize medical marijuana way back in 1996, decades ahead of the rest of the country.
California’s Emerald Triangle—Humboldt County, Mendocino County and Trinity County— is America’s largest cannabis cultivation region and produces some of the most premier strains worldwide.
How will the medical cannabis market be affected ?
Legalized recreational pot is unlikely to have any significant impact on the medical market. In fact, there are those who believe that the medical market will have a competitive advantage because they are already well entrenched in the industry. They have cannabis strains tailored to meet consumer demands which should allow them to ease straight into the recreational market.
It has been established that demand for medical cannabis decreases in states where recreational use is legal. According to Green Market Reports, a substantial number of California’s medical cannabis customers are “closet” recreational users.
The Federal boogie
The irony of the current doobie situation is that while smoking pot may be legal in almost half of the American states, it is still classified as a Schedule One drug, in the same category as heroin, by the Federal Government.
Could be crownedHowever, the times they are a-changing and there are obvious signs of bipartisan support for legalized cannabis at the Federal level.
California Republican, Barbara Lee, has proposed the introduction of a new act to protect state-legal cannabis from “excessive” Federal interference. This move should encourage investors. Headway is being made as there is a growing bipartisan support group giving the act its nod of approval. So, it would appear that both Republicans and Democrats acknowledge that pot is big business.
Adding fuel to that flame is Argudo’s announcement that he is optimistic that 2018 will herald:
—–> Discussions about legalizing banking services for those involved in the cannabis industry.
—–> De-scheduling cannabis as a Schedule One drug
—–> Implementing controls on the industry, much like alcohol
California’s 40 million-plus population, extremely lucrative tourist industry, entrenched cannabis culture and cultivation of premier strains are all winning combinations guaranteeing a recipe for success.
Figures from 2016 illustrate that:
—–> California has the biggest American state economy
—–> California is the sixth largest economy worldwide
—–> California has the biggest cannabis market worldwide
—–> California’s total legal cannabis sales in 2016 was $2.8 billion
—–> America accounts for 90 percent of the global $7.7 billion sales
—–> California accounts for nearly half of the nation’s total sales
When all of these facts are viewed a clearer overall picture emerges, and that is that California is set to become King of the Cannabis Crop.