Following the November 2016 passage of Proposition 64, which made the cultivation, sales, and use of cannabis legal for all people in California, it was expected that in a short amount of time the state would begin to reap the rewards of cannabis tax revenue. Recently California revealed that cannabis tax revenue has totaled more than $1 billion dollars since January of 2018. The rate at which the state is collecting cannabis tax dollars has increased in that time as well. In the first three months of 2018 the state recorded $72.6 million dollars while in the last three months of 2019 the number was over $172 million. That growth rate would suggest the possibility of annual tax revenue from legal cannabis sales in California to reach $1 billion in 2020.

Cannabis Tax Revenue Economic Boost

The state of California has a larger economy than the entire United Kingdom so $1 billion of extra tax revenue does not have a major impact. However, the state can still serve as an example of what is possible in other states with smaller economies where the money would make a much larger impact. Many states that would not previously have considered full scale legalization may be more apt to adopt such policies knowing the potential tax revenue incentives. Even those states which have the least favorable public opinion of cannabis legalization will soon not be able to deny its potential positive economic impact.

California already has the first U.S. cannabis cafe. It is entirely possible to continue to promote these and other cannabis-related economically smart measures. The state will continue to see its annual tax revenue rise as it continues to improve regulations surrounding cannabis. If California fails to act and update its laws, the issues it already has will be exacerbated.

Still Work to Be Done

Though it was a massive step in the right direction, the full legalization of cannabis has been a relatively small boost to California’s massive economy. As cannabis tax revenue continues to accumulate in California, it is important to highlight the issues that California must still correct. One massive problem that needs to be addressed is California’s thriving black market. According to some estimates, California’s black market accounts for nearly 75% of all cannabis sales.

This staggering number should drive California lawmakers to action. The continuing success of illicit black market dealers will only undermine any potential success of California’s legal cannabis market. If the right steps are taken, California has the potential to be the pinnacle of American cannabis legalization. Its success is necessary for the success of other states who may seek to move towards legalization.


Medical Marijuana 411 values providing our readers with information about the latest cannabis related topics for educational purposes and not for the intention of advocacy. This is not an advocacy-based organization. For ailment specific questions, please consult your primary care physician.

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