Report: Legalization in California Would Make the State a Cannabis “Epicenter”

Sales of cannabis in California over the next several years would skyrocket if the state chooses to legalize the substance via ballot initiative this November, according to a newly-released report.

The Arcview Group and the New Frontier — research firms whose report was released Tuesday — claim that that the Golden State would notch $1.6 billion in cannabis sales within one year of cannabis legalization being put into action. By 2020, the report states, sales in the state will climb to $6.5 billion.

“We think the activation of the adult-use market in California will undoubtedly make California the new epicenter in cannabis,” said New Frontier’s executive vice president of industry analytics, John Kagia.

Part of the reason for California’s perceived future dominance of the industry is its sheer numbers of sales: according to the report, almost half of the country’s legal cannabis sales take place in California, giving it a bottom-line haul that dwarfs that of any other state.

The study also notes that the ballot initiative appearing before the public in November — called Prop. 64 — allocates 10 percent of the sales tax collected to research on drug abuse and 10 percent on research into cannabis. According to Kasia, it is an indication that the state could play a key role in expanding cannabis-based research and literature.

“There’s going to be a professionalism of the industry, an emphasis on innovation once the market is legal in California that will dramatically accelerate the industry in a way that legalization (efforts) in Colorado and Washington haven’t been able to do,” he states.

The financial boomlet would reportedly take place among recreational cannabis, not medicinal: medical cannabis sales are projected to decline slightly from 2015 to 2020, from $2.76 billion to $2.53 billion.

California appears to be on the cusp of enacting the measure, with recent polling indicating that those supporting its passage far outnumber those opposing it.

It would be a mistake to assume, however, that the legalization debate in California centers solely around money. Other considerations are driving industry opinions on legalization.

For example, many of the state’s growers actually oppose its passage, fearing that many of the state’s independently-owned cultivation facilities could be gobbled up by venture capitalists as a result.

Other activists have taken issue with what they see as a failing in the bill, which they see as not going far enough in allowing individuals to possess

The report also points out that California’s southern neighbor, Mexico, would face pressure to legalize cannabis if California were to make the move first.

“The legalization debate south of the U.S. border has evolved quickly as illustrated by the evolution of Mexico’s President Enrique Pena Nieto who, in just six years, has transformed from one of Latin America’s most vocal drug warriors to a proponent of medical cannabis use and advocate for decriminalizing possession of up to an ounce for all adults. Legalization in California will only add fuel to the debate on cannabis law reform in Mexico and in other Latin American countries.”

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Author: John Winston

John Winston is a New York City-based journalist and a media advisor for

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