Pot sales fall short of ini­tial pro­jec­tions

Los Angeles Times - - CALIFORNIA - By Patrick McGreevy patrick.mcgreevy @la­times.com Twit­ter: @mc­greevy99

SACRA­MENTO — With tax rev­enue from le­gal pot sales in Cal­i­for­nia fall­ing short of pro­jec­tions, a fi­nan­cial anal­y­sis firm es­ti­mated Tues­day that to­tal sales this year will be $1.9 bil­lion, sig­nif­i­cantly less than \the $3.8 bil­lion the com­pany ex­pected.

The firm, New Fron­tier Data, had also es­ti­mated that to­tal sales in Cal­i­for­nia would reach $6.7 bil­lion by 2025, but now says it is more likely the in­dus­try will gen­er­ate $4.72 bil­lion by then.

Most cities in Cal­i­for­nia have re­fused to al­low pot busi­nesses, and there are tough rules for those who want state li­censes to grow, dis­trib­ute and sell mar­i­juana.

Both are to blame for the lower-than-pro­jected sales, said Gi­adha Aguirre De Carcer, chief ex­ec­u­tive of New Fron­tier Data.

Only about 30% of Cal­i­for­nia’s 540 cities and coun­ties have au­tho­rized some form of com­mer­cial cannabis ac­tiv­ity, said Amy Jenk­ins, a spokes­woman for the Cal­i­for­nia Cannabis In­dus­try Assn. That, she said, is “forc­ing con­sumers to turn to the il­licit mar­ket.”

New Fron­tier Data’s re­port could boost pend­ing leg­is­la­tion that would lower the state ex­cise tax on mar­i­juana sales to 11% from 15% to make it more ap­peal­ing to Cal­i­for­ni­ans who are still buy­ing cannabis on the black mar­ket.

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