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Despite facing financial and tax challenges, California’s marijuana industry remains unparalleled as the largest cannabis market globally. According to the recent MJBizFactbook report, the state is projected to generate approximately $5.9 billion in legal medical and recreational cannabis sales in 2023.
To provide perspective, this revenue could sustain the economy of a small island country. For instance, the International Monetary Fund (IMF) estimates that Barbados’s gross domestic product (GDP) will reach $6.1 billion this year. Additionally, the IMF forecasts Fiji’s GDP to be approximately $5.4 billion.
Given California’s colossal cannabis market, its magnitude is not surprising. If California were an independent country, its GDP for 2022, totaling $3.6 trillion, would rank fifth globally, positioned between Germany and India with $4.2 trillion and $3.2 trillion, respectively.
Furthermore, marijuana has become a prominent agricultural product in California, competing with and sometimes surpassing two major crops. In 2022, grape production, renowned for the state’s exceptional wine industry, reached a value of $5.5 billion, followed by almonds at $3.5 billion.
Comparatively, other marijuana markets in the United States pale in comparison to California’s sales. Michigan, the second-largest American marijuana market in terms of sales, is projected to generate only one-half of California’s consumer purchases, amounting to $3.1 billion in combined medical and recreational cannabis sales this year.
Until states with large populations such as New York or Pennsylvania bolster their markets, California is unlikely to face significant competition. This also holds true for countries such as Germany, which have yet to establish legal recreational markets.
While acquiring precise data on international legal cannabis sales is challenging, Canada, arguably the largest legal adult-use market outside the United States, reported recreational sales of just $3.4 billion in 2022.
Meanwhile, a bill to legalize marijuana cafes in California was recently approved by the state’s assembly committee. The measure allows dispensaries to offer noncannabis food and beverages at their locations, subject to local approval. California is also taking steps to broaden the market for marijuana outside of the state. Regulators are asking the attorney general’s office for a formal opinion on whether allowing marijuana commerce across state lines would put California at a heightened risk of federal enforcement action.
The governor approved a statute last year giving him the authority to enter into deals with other legal jurisdictions to import and export marijuana goods. The request for advice from DCC is an important first step that might ultimately result in the law being put into effect.
Companies such as IGC Pharma Inc. (NYSE American: IGC) that are looking to commercialize pharmaceutical-grade medicines from THC will not have to be concerned about laws surrounding interstate commerce in marijuana products because the moment a given formulation gains FDA approval, the makers are free to market it anywhere within the country.
NOTE TO INVESTORS: The latest news and updates relating to IGC Pharma Inc. (NYSE American: IGC) are available in the company’s newsroom at https://cnw.fm/IGC
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