A report estimates that if voters in California elect to legalize recreational marijuana this year, the state’s market would be worth $6.46 billion by the year 2020.
California’s marijuana market would be worth an estimated $6.46 billion by the year 2020 if the state were to legalize adult use marijuana, according to a new report from Arcview Market Research and New Frontier. The cannabis market research firms recently published the 2016 California Legal Cannabis Market State Profile, which projects that California’s legal marijuana market, currently valued at $2.76 billion, would pull in $1.6 billion in recreational sales in the first year of legalization and have an annual growth rate of 18.5 percent.
“California is the 6th largest economy in the world,” said Arcview CEO Troy Dayton. “The opportunity for jobs, tax money and wealth creation made possible by California ending marijuana prohibition cannot be overstated”.
California voters will have the opportunity to decide whether to legalize adult use marijuana this November, as Proposition 64, or the Adult Use of Marijuana Act (AUMA), qualified for this year’s ballot after campaigners collected over 600,000 signatures. If it passes, the initiative will legalize the possession, sale, use and cultivation of marijuana for adults aged 21 years and older.
California is already the largest state cannabis market in the United States, despite only having established medical marijuana laws. It was the first state to pass legal medical cannabis legislation in 1996. Since then, 24 additional states have followed suit.
“California’s legal medical cannabis market is the largest of any state, responsible for 62% of the country’s total medical cannabis sales in 2015 and over half of all legal cannabis sales (medical and adult use markets combined). All eyes are on California as voters decide on whether to legalize adult-use in the state in November. Success at the ballot box would massively increase California’s total legal market share,” said Troy Dayton, CEO of The ArcView Group.
Voters in California failed to pass a similar proposition six years ago. Proposition 19 was voted down with 54 percent voting “no” in 2010. However, a recent poll indicates that nearly two-thirds of Californians are now in support of legalizing marijuana.
“California is the cannabis market that is going to catapult the industry forward if they legalize adult use in November,” said Giadha DeCarcer, Founder and CEO of New Frontier. “It is the largest and most influential state in the cannabis industry in terms of production, consumption, and cultural influence. The legalization of adult use in California will have far-reaching effects, both within the state and nationally.”
“We think the activation of the adult-use market in California will undoubtedly make California the new epicenter in cannabis,” said John Kagia, executive vice president of industry analytics for New Frontier.
Under Proposition 64, a 15 percent excise tax in addition to the regular state sales tax would be applied to all marijuana retail sales. Sixty percent of the tax revenue would be allocated to youth education, prevention, early intervention and treatment programs to prevent youth drug abuse, while 20 percent would go to environmental cleanup and restoration and another 20 percent to cover DUI programs and grants to local governments related to enforcing the law.
Voters in Arizona, Arkansas, Florida, Maine, Massachusetts and Nevada will also be deciding on medical or recreational marijuana measures this November. The Arcview Market Research and New Frontier report projected that Nevada would pull in $630 million in sales by 2020 if the state legalized their own recreational marijuana initiative.