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Licensed cannabis production rises while wholesale and retail prices fall, shrinking industry value, DCC economists tell Assembly
Summary
Department of Cannabis Control staff and an outside economist told a California State Assembly joint informational hearing that licensed production has increased but unit prices have fallen enough that the overall gross value of the legal market is down; lawmakers pressed enforcement, tax and access measures to shore up the licensed market.
The Department of Cannabis Control presented data to a joint informational hearing of the California State Assembly showing that licensed cannabis production has increased while unit wholesale and retail prices have fallen, producing a decline in the gross sales value of the licensed market even as more licensed product moves through the supply chain.
Duncan McEwen, PhD, an economist with ERA Economics, summarized the presentation: “the overall gross value of the industry is down. Quantity produced through the industry is up, but retail prices and wholesale prices, have fallen.” He said licensed production rose year over year and that production shipped through the licensed supply chain increased by double-digit percentage points, but price declines outpaced those volume gains.
The data presented to the committee showed licensed production at roughly 1,400,000 pounds (dry flower equivalent) and an overall estimated…
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