Trade Group Says 90% of CA’s Cannabis Retail Businesses Have Closed

How bad is the situation for legal cannabis in California? So bad that nearly 90% of marijuana dispensaries in the state have closed in the past five years.

That’s according to the United Cannabis Business Association, a San Fernando Valley-based trade group headed by Jared Kiloh of the Higher Path dispensary in Sherman Oaks.

Kiloh’s group based the figure on data from the website Weedmaps.com. In 2017, the database showed there were around 8,000 cannabis retail shops in California. That number has since dropped to around 850.

A combination of high taxes, regulation, and a thriving black market are all to blame.

“In Los Angeles County, the black market price for cannabis is as much as 60% less as the price charged by licensed sellers,” Kiloh told the Los Angeles Business Journal.

In addition to changes at the state level, the industry is pushing for local tax reform, such as a ballot measure that would reduce the 10% business license tax for cannabis businesses in the City of Los Angeles.

Any reforms will need to be coupled with stronger enforcement against illegal operators, licensed operators say.

“People walk into these stores and can’t tell the difference between them and legitimate businesses, except that the price for the product is a whole lot cheaper,” explained Javier Montes, managing partner and owner of Delta IX THC in Los Angeles.

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