A legal marijuana market in California could translate to more than $2 trillion at the retail level, according to research by San Francisco Weekly.
The newspaper estimated demand in California could exceed 2.1 million pounds per year. Price per pound of weed depends on the quality of the product, and it varies from one part of the state to another, but the paper used an average of $1,000 per pound. That would put the value of a legal marijuana market at $2.1 trillion.
That conclusion is based on trends in Colorado, where pot has been on sale in retail stores since Jan. 1. Colorado legalized cannabis in 2012, as did Washington State.
Tourists, Students Could Mean Big Money
According to a study prepared for state officials, demand in Colorado is about 130 metric tons, or 286,600 pounds per year. Tourists account for about 7 percent of that amount, according to the study.
If the same patterns were to play out in the Golden State, including equal rates of pot use by the general population and by tourists, demand in California would be more than 2.1 million pounds – which amounts to $2.1 trillion in retail sales.
That amount could vary considerably, as could the cost of a pound of weed. But even considering those variables, it’s possible legal pot could be a multi-trillion industry in California.
“It’s admittedly nothing more than a total back-of-the-envelop guesstimate,” said Sean Donahue, deputy director of the California Cannabis Industry Association.
If anything, the estimate may be low, Donahue said. That’s because California has a larger student population than Colorado and attracts many more tourists. Plus, the climate is even better suited to mass marijuana production.
Can Weed Really Do That Well?
Medical marijuana has been legal in California since 1996. That market generated about $1 billion in sales last year.
Petitions circulated earlier this year seeking to put full legalization on the November ballot. There were four such efforts, but all of them failed. The early phase of a campaign to legalize in 2016 is already underway.
But it’s not guaranteed legal weed would bring such hefty rewards to the Golden State. For one thing, medical marijuana here is already just a step from legalized – it’s usually a matter of a few bucks to get registered as a patient, and there’s very little regulation.
If that market only generates $1 billion per year, it’s hard to see how a fully legal market could pull in more than 2,000 times that amount. But one thing is clear already: Legal marijuana will be huge when it arrives in California.