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Thursday, July 17, 2014

Demand For Legal Marijuana In California Could Top $2.1 Billion

Posted By on Thu, Jul 17, 2014 at 10:40 AM

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It's not just cops and weedheads who are eagerly watching Colorado's experiment with marijuana legalization. Bankers and businesses also have a very literal stake in the legal cannabis game. What happens in Colorado is likely a bellwether for what will happen elsewhere in the country once marijuana is made legal.

Here's an example: Based on what we're seeing in Colorado, demand for legal, recreational marijuana in California could exceed 2.1 million pounds. If a pound of weed fetches about $1,000, that's $2.1 billion worth of marijuana at the retail level.

According to the the state agency in charge of legal weed in Colorado, annual demand there is 130 metric tons. If Colorado's numbers are scaled to fit California's population and tourists, we're talking trillions.

In the Colorado study, which was prepared for the Department of Revenue, analyst pegged the annual demand for legal weed at about 121.4 metric tons. Coupled with the nine metric tons consumed by tourists, that's 130 metric tons -- or 286,000 pounds.

And Colorado is a small state, with about eight million people. There are more people in the Bay Area than in all of Colorado and California has about 7.5 times as many people as Colorado, at 38 million -- and counting.

For safety's sake, let's assume consumption patterns in California will be about the same as they are in Colorado. If so, California could consume 975 metric tons of cannabis, or over 2.1 million pounds.That estimate may even be conservative, said Sean Donahue, the deputy director of the California Cannabis Industry Association, which has been lobbying for better regulations in Sacramento.

There are also more tourists and more university students in the Golden State, where the climate is well-suited for cannabis cultivation. Think about wine, cheese, milk, lettuce -- all the things grown here in scale.

"It's admittedly nothing more than a total back-of-the-envelope guesstimate," he cautioned. But it may be time to start using the b-word -- as in billion -- to describe marijuana's potential for California.

Correction: A previous version of this story gave an erroneous figure. The demand for 2.1 million pounds of recreational marijuana would mean a $2.1 billion demand for marijuana. SF Weekly regrets the error.

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About The Author

Chris Roberts

Chris Roberts has spent most of his adult life working in San Francisco news media, which is to say he's still a teenager in Middle American years. He has covered marijuana, drug policy, and politics for SF Weekly since 2009.

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