San Francisco Cannabis Sales Have Hit a Slump. How Will Leaders Respond?
San Francisco’s legal cannabis industry has hit an anti-climax. A recent report from the Office of the Controller shows sales declining, SF Evergreen reports, just as a flurry of new companies try to enter the legal market.
During the second quarter of 2019, covering April through June of last year, Pomrenke says S.F. pot purchases “stopped the downward trend and ended with the highest amount of cannabis taxable sales recorded at $61,998,965.” That spike set a new record monthly average of $20.6 million, likely aided by last year’s 4/20 bacchanalia falling on a Saturday.
But then sales nosedived back downward again in the following three months. Net pot purchases dipped to $56 million from July through September 2019, marking a 9.1 percent decline.
That means $226 million in cannabis was sold in the last 12 months on which we have hard numbers. We won’t have the late 2019 numbers for a couple months. “There is typically a four to five month lag in the collection of this data,” Pomrenke tells us. “Q4 for 2019 will not be available until about April 2020.”
“The green rush is over,” Board of Supervisors Cannabis Oversight Committee member Sara Payan declared. “Cannabis isn’t the cash cow that people outside of the industry think that it is. Incorporating all these taxes is actually hindering access and lowering sales.”
San Francisco weed prices are the highest of any major city in a legal state at an average of $20 per gram. That’s part of the problem. But the black market’s robustness and the large number of cannabis businesses in San Francisco’s marketplace are also major factors.
There’s more where that came from. 133 retail cannabis permit applications are pending right now. SFist notes that’s “far more than the city can likely support, lawmakers are now realizing.” We could soon see a freeze on new permits if the current state of affairs continues.