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California Marijuana Sales Climbing Despite Coronavirus, State Report Shows

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California took in more than $208 million in marijuana tax revenue during the last quarter, slightly exceeding figures from the first quarter of the year, the California Department of Tax and Fee Administration (CDTFA) announced on Wednesday.

While numerous industries are suffering amid the coronavirus pandemic, the report from California is another example of how the cannabis market seems to be riding out the storm.

“Total tax revenue reported by the cannabis industry is $208.4 million for 2nd Quarter returns due by July 31, 2020. This does not include tax revenue collected by each jurisdiction,” the department said in a press release. “Previously reported revenue for 1st Quarter 2020 returns was revised to $205.9 million, which included $107.4 million in cannabis excise tax, $26.9 million in cultivation tax, and $71.6 million in sales tax.”

All told, the state has seen $1.45 billion in marijuana tax revenue since retail sales were implemented in 2018. That’s from a combination of excise, cultivation and sales taxes.

According to a recent study, that revenue could be significantly stronger if local bans on cannabis businesses were lifted. Currently, 75 percent of cities and counties in the state have implemented marijuana market bans despite the 2016 statewide vote to legalize the plant for adult use.

CDTFA is also working to hold illicit marijuana operators in the state accountable and announced last month that it had issued tax warrants for twelve cannabis retailers that were doing business illegally in Los Angeles and San Bernardino counties.

While the department’s analysis shows an increase in revenue, the state Legislative Analyst’s Office (LAO) took a different approach and determined in a separate report released on Wednesday that there was actually a seven percent decline over the same time period. However, they decided against factoring in sales tax and focused exclusively on excise and cultivation tax revenue, accounting for the discrepancy in the two agencies’ findings.

Seth Kerstein, the analyst behind the LAO report, told Marijuana Moment that there are a number of reasons they omitted the sales tax data, including problems with the precision of the methodology to obtain that information and potential complications related to the timing of reporting sales tax.

He said the office has two theories about why excise and cultivation tax revenue might have declined: “The administrative rate adjustments and consumer stockpiling in the early days of the COVID-19 crisis.”

“We can’t say for sure whether the strong growth was due to one of these things, both of them, or something else we haven’t thought of,” he said of the increase in sales during the previous quarter earnings. “That said, there are some indications of an ‘all of the above’ story—these two factors, plus potentially others.”

Another state that’s seeing notable upticks in legal cannabis purchases is Illinois, which launched retail marijuana sales in January. The state experienced another record-breaking month of recreational cannabis sales in July, totaling almost $61 million. That smashed the previous record set in June of nearly $47 million.

Over in Oregon, officials have been witnessing a similar sales trend amid the global health crisis. Data released in May showed sales of adult-use cannabis products were up 60 percent.

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Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Kyle Jaeger is Marijuana Moment's Los Angeles-based associate editor. His work has also appeared in High Times, VICE and attn.

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State Of Montana Launches Online Hemp Marketplace To Connect Buyers And Sellers

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Say you’re a Montana farmer who has planted acres of industrial hemp. As harvest nears, you’re looking to offload it. Where do you go to find a buyer?

Montana’s Department of Agriculture says it has the answer.

The state this week announced the launch of an online “Hemp Marketplace,” unveiling an online portal meant to connect the hemp farmers with buyers in search of seeds, fiber and derivatives such as cannabidiol, or CBD.

“The Hemp Marketplace concept originated from the same idea as the department’s Hay Hotline,” the Agriculture Department says on its website, “only instead of hay and pasture, the online tool connects buyers and sellers of hemp and hemp derivatives.”

Listings are free of charge.

Montana online Hemp Marketplace screenshot

Montana Department of Agriculture

Montana farmers have embraced industrial hemp since the state legalized its production under a federal pilot program. The first legal crop was planted in 2017, and in recent years the state has led the country in terms of space dedicated to the plant. In 2018, for example, licensed farmers in Montana grew more acreage of hemp than any other U.S. state. While other states have since eclipsed the state’s hemp production—the crop became broadly federally legal through the 2018 Farm Bill—Montana remains an industry leader.

But to make revenue, farmers have to be able to sell their crop. That’s where the new hemp marketplace comes in. The online portal is essentially a sophisticated bulletin board for buyers and sellers, split into “Hemp for Sale” and “Hemp to Buy” categories.

“With hemp being a relatively new crop grown in Montana, the department recognizes that these markets are still developing,” Department of Agriculture Director Ben Thomas said in a statement. “The Hemp Marketplace was designed to help facilitate connections between buyers and sellers. I’m looking forward to seeing how the marketplace will continue to advance the industry.”

Listings include what type of products are on offer (or being sought), whether a given crop is organic and even whether laboratory testing data is available. The portal also organizes products into one of four varieties based on whether the hemp seeds have been certified by regulators. None of the products may contain more than 0.3 percent THC—the upper limit for what qualifies as hemp under both state and federal law.

Meanwhile, Montana voters are set to decide on Tuesday whether the state will legalize hemp’s more infamous cousin, high-THC marijuana. According to a poll released this week, passage looks likely: The survey, conducted by Montana State University at Billings, found that 54 percent of likely voters plan to support legal cannabis on the ballot. Another 38 percent said they were opposed, while 7 percent remained undecided.

At the federal level, officials at the Drug Enforcement Administration are still working to revise rules around marijuana and hemp to reflect Congress’s move to legalize hemp broadly in 2018. While the public comment on the proposals closed earlier this month, nine members of Congress cautioned the agency against adopting its proposed changes, warning some could put hemp producers at risk of criminal liability. Already a number of arrests and seizures have been made by law enforcement officers confused whether products were legal hemp or illicit marijuana.

The U.S. Department of Agriculture (USDA), meanwhile, has faced separate criticism over its own proposed hemp rules, though it has been more proactive in addressing them. Following significant pushback from the industry over certain regulations it views as excessively restrictive, the agency reopened a public comment period, which closed again this month.

USDA is also planning to distribute a national survey to gain insights from thousands of hemp businesses that could inform its approach to regulating the market.

Montana Marijuana Legalization Ballot Measure Has Solid Lead In New Poll

Photo courtesy of Brendan Cleak

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Missouri Launches Medical Marijuana Sales At State’s First Dispensaries

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Less than two years after Missouri voters approved a ballot measure to legalize medical marijuana, dispensaries made the state’s first cannabis sales to patients on Saturday.

N’Bliss Cannabis opened the doors of two separate St. Louis County locations, in Ellisville and Manchester.

“Missouri patients have always been our north star as we work to implement the state’s medical marijuana program,” Dr. Randall Williams, director of the Missouri Department of Health and Senior Services, said in a press release. “We greatly appreciate how hard everyone has worked so that patients can begin accessing a safe and well-regulated program.”

Officials have touted the speed with which they have gotten the voter-approved cannabis program off the ground, saying it is “one of the fastest implementations of a medical marijuana program in the United States.”

Via Missouri Department of Health and Senior Services.

“A tremendous amount of work has occurred by the licensed facilities and our team to get us to this point, and we continue to hear from more facilities that they are ready or almost ready for their commencement inspection,” Lyndall Fraker, director of the Section for Medical Marijuana Regulation, said in a press release. “We look forward to seeing these facilities open their doors to serve patients and caregivers.”

The impending launch of sales on Saturday was first announced by the Missouri Medical Cannabis Trade Association on Friday and reported by The Springfield News-Leader.

The state, which has so far licensed 192 dispensaries and expects most of them to open their doors by the end of the year, posted an interactive map that tracks the status of approved medical marijuana businesses.

For months, regulators have been caught up in lawsuits and appeals challenging their licensing decisions, with revenues that would otherwise go to supporting veteran services instead being allocated to covering legal costs.

Missouri isn’t the only state to see medical cannabis sales launch this weekend. Virginia’s first medical marijuana dispensary also held its grand opening on Saturday.

Meanwhile, recreational sales of marijuana rolled out in Maine last week—four years after voters there approved a legalization ballot measure.

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Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.
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Illinois Continues Record-Breaking Marijuana Sales Streak, New State Data For September Shows

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For the fifth month in a row, Illinois is again reporting record-breaking marijuana sales, the state Department of Financial and Professional Regulation announced on Monday.

Despite the coronavirus pandemic, Illinois has seen escalating cannabis sales month-over-month. In September, consumers purchased more than 1.4 million marijuana products worth a total of nearly $67 million. Almost $18 million of those sales came from out-of-state visitors.

In August, the total sales reached about $64 million—the previous monthly record. The new adult-use sales figures don’t include data about purchases made through the state’s medical cannabis program.

This latest data seems to support the notion that the state’s marijuana market is “recession-proof” and “pandemic-proof,” as a top regulator said in August.

Via IDFPR.

State officials have emphasized that while the strong sales trend is positive economic news, they’re primarily interested in using tax revenue to reinvest in communities most impacted by the drug war. Illinois brought in $52 million in cannabis tax revenue in the first six months since retail sales started in January, the state announced in July, 25 percent of which will go toward a social equity program.

“We were not doing this to make as much money as fast as we possibly could,” Toi Hutchinson, senior cannabis advisor to Gov. J.B Pritzker (D), said. “We were actually doing this for people,” with a focus on supporting communities most impacted by the drug war.

In May, the state also announced that it was making available $31.5 million in restorative justice grants funded by marijuana tax revenue.

That said, ensuring an equitable market as promised hasn’t been easy. Regulators have recently faced lawsuits after dozens of would-be social equity licensees were denied an opportunity to participate in a licensing lottery over alleged problems with their applications. The state said it would approve 75, but only 21 ultimately qualified—and critics complain that the resources it takes to submit an acceptable application creates barriers for the exact people the special licenses are supposed to help.

The governor announced last month that new procedures would be implemented allowing rejected applicants to submit corrected forms. But on Monday, three investors who are finalists from the initial round filed a lawsuit against the state, alleging that the administration’s decision to permit resubmissions was politically motivated and illegal.

For now, the out-of-state sales data seems to support Pritzker’s prediction during his State of the State address in January that cannabis tourism would bolster the state’s coffers.

Prior to implementation, the pardoned more than 11,000 people with prior marijuana convictions.

Over in Oregon, officials have been witnessing a similar sales trend amid the global health crisis. Data released in August reveals that the state saw about $106 million in medical and recreational cannabis sales, marking the third month in a row that sales exceeded $100 million.

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Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.
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