For the first time since recreational sales began in California in 2018, the Golden State saw a year-over-year decline in its cannabis revenue, ending 2022 down more than $470 million from the previous year’s record high of about $5.8 billion, a drop of nearly 8.2%.
According to numbers posted by the California Department of Tax and Fee Administration, California’s licensed cannabis retailers sold $5.3 billion worth of cannabis in 2022 compared to nearly $5.8 billion in 2021.
Cannabis revenue in Q4 of 2022 dropped to about $1.27 billion in sales, down from $1.29 billion the previous quarter and to its lowest point since Q2 2020, the beginning of the pandemic. Overall, Q4 sales were down nearly 12% year-over-year.
Sales in California peaked in Q2 2021 at approximately $1.57 billion and have generally been falling since, with the exception of a slight uptick in Q2 2022.
California was one of several mature markets that saw revenue fall in 2022, according to analysts at BDSA, which cited falling wholesale prices as one reason.
The drop in sales also fed into a decline in tax revenue collected by the state. Total cannabis tax revenue fell to about $1.09 billion in 2022, down from about $1.36 billion the year before. However, much of the drop in tax revenue came from the elimination of the cultivation tax for the second half of the year, though sales tax and cultivation tax revenues were also down from the 2021.
— Brian Beckley