With California’s top cop calling legalization ‘inevitable' in the Golden State, the question remains: how big would a legal market be?
Marijuana’s federal illegality obscures the market’s dimensions, but with legalization in other states, researchers can begin to estimate the scale of the business on the West Coast. Colorado’s legal cannabis market grossed $700 million in 2014 on its way to $1 billion by 2016, the Washington Post reports.
California NORML executive director Dale Gieringer estimates this week that the Golden State’s market could be ten times that size. The total adult-use demand for marijuana in California is estimated at 1,000 tons or 2 million pounds per year.
The size of California’s retail market will depend on the price of marijuana. At today’s retail price of about $320/oz, the total California market comes to $10 billion.
The main caveat is that legal pot would likely be dramatically cheaper because 90 percent of cannabis’ price consists of a risk premium and black market inefficiencies.
“At the current Israeli retail price of $64 per ounce, the market would come to just $2 billion,” Gieringer states.