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Hugged to death: https://web.archive.org/web/20230502143621/https://www.greenmarketreport.com/adult-use-cannabis-has-delivered-15-billion-in-tax-revenues/ https

Hugged to death: https://web.archive.org/web/20230502143621/https://www.greenmarketreport.com/adult-use-cannabis-has-delivered-15-billion-in-tax-revenues/ https://web.archive.org/web/20230502143621/https://www.green... Better takeaway is actually: > For the first time in the U.S., adult-use cannabis tax revenue declined across legal states in 2022.

PragmaticPulp 3y ago
The decline is definitely more interesting than the headline. The headline number is also a cumulative total since legalization started. The annual tax revenue is around $4 billion: > According to a new report from the Marijuana Policy Project, cannabis sales tax generated a healthy $3.77 billion in 2022, but that was slightly below 2021’s tax revenue of $3.86 billion. The article doesn't speculate why revenues are declining. I wonder why. Maybe past high revenues were an artifact of people staying home during COVID? Or is it a result of decreasing prices? I'm not a consumer, so I don't really know what's going on in the market.
- givinguflac 3y ago
  The market is going through equalization with prices bottoming out over the next 6-12 months. There will be lots of smaller shops bought up by multi-state companies.
- throwaway0989 3y ago
  I know a number of people who are tired of high priced dispensaries and have started to grow or buy from friends again. Prices everywhere I've seen are really high, for hemp-derived products too.
- tmpz22 3y ago
  Anecdotally a lot of people over-used during COVID and have diminished the habit since. As another mentioned increasing costs in a questionable economy doesn't help either. I've personally experienced shrinkflation to the greatest extent of any consumer product in weed and weed accessories.
- anoonmoose 3y ago
  I put off going out of state to buy for a few months when I knew my state was opening up shops soon. Obviously that can't be the entire reason, but I think stuff like that combined with people having more interest when the shops are new combined with the impacts of inflation could easily result in a tiny occasional YoY dip.
- ecommerceguy 3y ago
  Missouri just went full legal. I went to a cannabis b2b trade show a few weeks ago and chatted with a vendor from Michigan. He indicated it's been his experience that the first few months recreational sales go gangbusters and then the novelty wears off and sales decline, while at the same time cultivation ticks up and prices fall. The recreational sales in Missouri is being described as booming. https://www.kcur.org/news/2023-03-05/legal-weed-missouri-recreational-marijuana-sales-cannabis-dispensary-indica-sativa https://www.kcur.org/news/2023-03-05/legal-weed-missouri-rec...
  - michaelsbradley 3y ago
    Indeed, there are several dispensaries nearby to where I live in St. Louis, Missouri — they either opened since legalization or can now sell to recreational users instead of only to those with a medical prescription. Whenever I've passed by, the lines are out the door and down the sidewalk, especially on the weekends.
  - hbn 3y ago
    I have to imagine there's a boom of people trying it for the first time when it becomes legal who then realize it's not as universally enjoyable of a high as alcohol. It's weird how most of the discussion I hear about weed is how it just makes movies funny and you get hungry. But then most people I've talked to about it one-on-one don't have nearly as good of an experience, myself included. It makes me paranoid and depressed, and if I try watching a movie I can't remember what happened a scene ago so I can't follow the story. My passage of time gets screwed up, adding to the paranoia/fear, and I occasionally realize I'm clenching my jaw, and I've experienced jaw pain the next day from it. Not to mention how it saps all your energy/motivation. At least talking to your friend when you're drunk can lead to some funny conversations. Conversations/socialization between people who smoked weed is just nothing.
    - 2-718-281-828 3y ago
      most people use way too much. start with 0.03g per session and then report back.
    - 3y ago
- harimau777 3y ago
  This is 100% zero evidence speculation, but maybe increased legalization is leading to increased growing/availability and therefore lower prices?
  - bitxbitxbitcoin 3y ago
    Supply and demand. There are interesting dynamics to that basic model because the legacy market is still alive and thriving, but this is still the answer.
  - skeeter2020 3y ago
    maybe, but this is a highly regulated, highly taxed product, so there is a definite floor to that price. Canada has seen massive amounts of consolidation as the bud comes over the green goldrush
  - WorldMaker 3y ago
    Relatedly, it would also be likely to expect a shift in "THC tourism" dollars, as legalization increases, in the people that might before visit the next state over or a remote state and "stock up" some amount of supply for some amount of time between visits versus when they can buy it on demand closer to home and don't need a longer supply cache.
- ksherlock 3y ago
  Some of that may be that cannabis sales are shifting to unlicensed (and thus untaxed) dealers. WSJ had an article last week about California and NY screwing up legalization but some numbers from California: $5.4 billion in licensed sales last year vs $8.1 billion in unlicensed sales. Licensed sales have 10% city cannabis tax, 15% state excise tax, and 9.5% state sales tax. With taxes, licensing, etc etc licensed weed is twice as expensive. https://www.wsj.com/articles/marijuana-legalization-dispensary-california-new-york-db1bb11c https://www.wsj.com/articles/marijuana-legalization-dispensa...
  - Red_Leaves_Flyy 3y ago
    incompetent politicians or political bodies have a habit of using whatever income is politically convenient to plug budget gaps. Marijuana is just the latest victim. Whether that destroys the market or ruins peoples lives is ignored so long as it politically tenable.
- owenversteeg 3y ago
  Revenues have actually declined on a per-state level for three years now in some states despite inflation. General sales tax receipts are up by 27% since 2020 [0] and meanwhile California's weed sales are down. Even better, until recently they were rising at a rapid pace, having rose 2.82x from Q1 2018 to Q2 2020. [1] The reason why is obvious to anyone who's attended a party in the last few years: weed isn't cool anymore. Partly by being illegal, it used to be cool, but now it's accessible to anyone. A lot of people had that realization when they heard "oh, I'm into weed now" from their uncool middle-aged uncle whose previous hobbies had included LARPing and painting miniatures. It's not even just about the legality though: smoking a joint is a hell of a lot cooler than sucking on a USB stick that smells like candy grapes, and vapes, being far more convenient, have now been tied to weed's image. Something being cool is far better marketing than any ad ever designed. [0] https://fred.stlouisfed.org/series/QTAXT09QTAXCAT1USYES https://fred.stlouisfed.org/series/QTAXT09QTAXCAT1USYES [1] https://www.cdtfa.ca.gov/dataportal/charts.htm?url=CannabisTaxRevenues https://www.cdtfa.ca.gov/dataportal/charts.htm?url=CannabisT...

PragmaticPulp 3y ago

The decline is definitely more interesting than the headline. The headline number is also a cumulative total since legalization started. The annual tax revenue is around $4 billion: > According to a new report from the Marijuana Policy Project, cannabis sales tax generated a healthy $3.77 billion in 2022, but that was slightly below 2021’s tax revenue of $3.86 billion. The article doesn't speculate why revenues are declining. I wonder why. Maybe past high revenues were an artifact of people staying home during COVID? Or is it a result of decreasing prices? I'm not a consumer, so I don't really know what's going on in the market.

givinguflac 3y ago
The market is going through equalization with prices bottoming out over the next 6-12 months. There will be lots of smaller shops bought up by multi-state companies.
throwaway0989 3y ago
I know a number of people who are tired of high priced dispensaries and have started to grow or buy from friends again. Prices everywhere I've seen are really high, for hemp-derived products too.
tmpz22 3y ago
Anecdotally a lot of people over-used during COVID and have diminished the habit since. As another mentioned increasing costs in a questionable economy doesn't help either. I've personally experienced shrinkflation to the greatest extent of any consumer product in weed and weed accessories.
anoonmoose 3y ago
I put off going out of state to buy for a few months when I knew my state was opening up shops soon. Obviously that can't be the entire reason, but I think stuff like that combined with people having more interest when the shops are new combined with the impacts of inflation could easily result in a tiny occasional YoY dip.
ecommerceguy 3y ago
Missouri just went full legal. I went to a cannabis b2b trade show a few weeks ago and chatted with a vendor from Michigan. He indicated it's been his experience that the first few months recreational sales go gangbusters and then the novelty wears off and sales decline, while at the same time cultivation ticks up and prices fall. The recreational sales in Missouri is being described as booming. https://www.kcur.org/news/2023-03-05/legal-weed-missouri-recreational-marijuana-sales-cannabis-dispensary-indica-sativa https://www.kcur.org/news/2023-03-05/legal-weed-missouri-rec...
- michaelsbradley 3y ago
  Indeed, there are several dispensaries nearby to where I live in St. Louis, Missouri — they either opened since legalization or can now sell to recreational users instead of only to those with a medical prescription. Whenever I've passed by, the lines are out the door and down the sidewalk, especially on the weekends.
- hbn 3y ago
  I have to imagine there's a boom of people trying it for the first time when it becomes legal who then realize it's not as universally enjoyable of a high as alcohol. It's weird how most of the discussion I hear about weed is how it just makes movies funny and you get hungry. But then most people I've talked to about it one-on-one don't have nearly as good of an experience, myself included. It makes me paranoid and depressed, and if I try watching a movie I can't remember what happened a scene ago so I can't follow the story. My passage of time gets screwed up, adding to the paranoia/fear, and I occasionally realize I'm clenching my jaw, and I've experienced jaw pain the next day from it. Not to mention how it saps all your energy/motivation. At least talking to your friend when you're drunk can lead to some funny conversations. Conversations/socialization between people who smoked weed is just nothing.
  - 2-718-281-828 3y ago
    most people use way too much. start with 0.03g per session and then report back.
  - 3y ago
harimau777 3y ago
This is 100% zero evidence speculation, but maybe increased legalization is leading to increased growing/availability and therefore lower prices?
- bitxbitxbitcoin 3y ago
  Supply and demand. There are interesting dynamics to that basic model because the legacy market is still alive and thriving, but this is still the answer.
- skeeter2020 3y ago
  maybe, but this is a highly regulated, highly taxed product, so there is a definite floor to that price. Canada has seen massive amounts of consolidation as the bud comes over the green goldrush
- WorldMaker 3y ago
  Relatedly, it would also be likely to expect a shift in "THC tourism" dollars, as legalization increases, in the people that might before visit the next state over or a remote state and "stock up" some amount of supply for some amount of time between visits versus when they can buy it on demand closer to home and don't need a longer supply cache.
ksherlock 3y ago
Some of that may be that cannabis sales are shifting to unlicensed (and thus untaxed) dealers. WSJ had an article last week about California and NY screwing up legalization but some numbers from California: $5.4 billion in licensed sales last year vs $8.1 billion in unlicensed sales. Licensed sales have 10% city cannabis tax, 15% state excise tax, and 9.5% state sales tax. With taxes, licensing, etc etc licensed weed is twice as expensive. https://www.wsj.com/articles/marijuana-legalization-dispensary-california-new-york-db1bb11c https://www.wsj.com/articles/marijuana-legalization-dispensa...
- Red_Leaves_Flyy 3y ago
  incompetent politicians or political bodies have a habit of using whatever income is politically convenient to plug budget gaps. Marijuana is just the latest victim. Whether that destroys the market or ruins peoples lives is ignored so long as it politically tenable.
owenversteeg 3y ago
Revenues have actually declined on a per-state level for three years now in some states despite inflation. General sales tax receipts are up by 27% since 2020 [0] and meanwhile California's weed sales are down. Even better, until recently they were rising at a rapid pace, having rose 2.82x from Q1 2018 to Q2 2020. [1] The reason why is obvious to anyone who's attended a party in the last few years: weed isn't cool anymore. Partly by being illegal, it used to be cool, but now it's accessible to anyone. A lot of people had that realization when they heard "oh, I'm into weed now" from their uncool middle-aged uncle whose previous hobbies had included LARPing and painting miniatures. It's not even just about the legality though: smoking a joint is a hell of a lot cooler than sucking on a USB stick that smells like candy grapes, and vapes, being far more convenient, have now been tied to weed's image. Something being cool is far better marketing than any ad ever designed. [0] https://fred.stlouisfed.org/series/QTAXT09QTAXCAT1USYES https://fred.stlouisfed.org/series/QTAXT09QTAXCAT1USYES [1] https://www.cdtfa.ca.gov/dataportal/charts.htm?url=CannabisTaxRevenues https://www.cdtfa.ca.gov/dataportal/charts.htm?url=CannabisT...