State economist: licensed cannabis production rising while prices and gross market value fall

Licensed cannabis production in California has increased in recent years even as wholesale and retail unit prices have fallen, producing a decline in the industry—9s overall gross value, Department of Cannabis Control officials and the department—9s economist told a joint Senate and Assembly hearing.

"Total number of licenses is down," said Duncan McEwen, the economist who prepared the market analysis for the department, "but total production going through the licensed market is increasing and has increased by double-digit percentage points year over year. Unit prices at wholesale and retail are down by more than the increase in units produced, so gross value is down." McEwen summarized his presentation by saying the licensed market is growing in quantity but faces headwinds that limit revenue growth.

Clint Kellum, chief deputy director of the Department of Cannabis Control (DCC), and Christina Dempsey, the department—9s deputy director for government affairs, presented the report requested by the Legislature. Dempsey walked lawmakers through the regulatory history that led to creation of the Department of Cannabis Control in July 2021 and the…