California legal cannabis crop value drops 40% amid industry ‘tumult’

The value of California’s legal cannabis crop dropped 39.7% last year while tonnage increased 12%, another sign of how the licensed industry continues to struggle to survive competition from the illicit trade and regulatory challenges, a new report said.

The wholesale value of cannabis for adult use from licensed Golden State farmers was $1 billion last year, down from $1.66 billion in 2021, according to a cannabis harvest report released Nov. 1 by Leafly.

The Seattle-based online marketplace and information service for legal weed found that the legal crop in the state weighed in at 577 metric tons, up from 517 a year earlier, yet the number of cultivation licenses slipped by nearly 9% to 6,881.

Leafly Senior Editor David Downs discussed the report at a local cannabis industry roundtable hosted by local dispensary Solful on Nov. 3 at Glentucky Family Farm, a Sonoma Valley produce, herb and cannabis operation run by natural-methods vintner and now cultivator Mike Benziger.

Downs noted both the rapid rise of the legal crop nationwide and the legal industry’s uphill fight.

“There's a period of tumult, and we are in it — the historic interregnum for the Prohibition era falling and the next era rising,” Downs said.

After permitting medical marijuana in the mid-1990s, California voters legalized adult recreational use in 2016. Now, 15 states allow retail sales. Virginia voters OK’d it last year for personal use but not for retail sale.

Four more states — Maryland, Missouri, North Dakota and South Dakota — have it on their November ballots.

“This is a historic time for the plant and the culture and the industry,” Downs said.

In 2020, Leafly’s estimate of California crop wholesale revenue for legal cannabis would rank it sixth statewide, comparing Leafly’s data with those from the U.S. Department of Agriculture. That would be behind almonds ($5.25 billion), table and wine grapes ($4.49 billion), lettuce ($3.07 billion), pistachios ($2.62 billion) and strawberries ($2.21 billion), but ahead of conventional flowers ($967 million) and walnuts ($948 million).

Yet a year later, legal weed in the state had slid to eighth place among state crops, tying with rice ($1 billion).

Nationwide, legal cannabis cultivators last year sold 2,834 metric tons for $5.03 billion under 13,297 licenses. That is up 24.4% by weight from 2020, down 18.5% by value and barely up by just about 250 licenses.

The 2021 crop value ranked No. 6 behind cotton ($7.5 billion).

But U.S. residents smoked or otherwise consumed an estimated 15,000 metric tons of weed last year, highlighting the gap between the illicit crop and the licensed.

“We’re about a fifth of the way there,” Downs said.

Leafly has been compiling and analyzing reports on legal cannabis crop yields and estimated values for the past two years with the help of Whitney Economics. The U.S. Department of Agriculture doesn’t track cannabis crops because marijuana is still considered an illicit drug. A stated goal behind Leafly’s reports is to portray licensed pot growers as legit farmers.

And for growers in California’s Emerald Triangle key cannabis growing region (Mendocino, Humboldt and Trinity counties), that goal of earning public respect came home on Tuesday, when the Humboldt County Board of Supervisors approved a two-year reprieve from a local excise tax.

“And the most emotional moment wasn't that we won the suspension of Measure S in Humboldt County, it was that we were referred to as farmers and we're doing agriculture,” said Craig Johnson of Alpenglow Farms at the roundtable discussion.

Compared with the billion-dollar California cannabis crop last year, the value of that year’s wine grape harvest was $3.2 billion for the state and of $1.2 billion for the premium North Coast region (defined by USDA as largely Napa, Sonoma, Mendocino and Lake counties).

California recreational legalization, legit weed farmers in the North Coast region known for both top-end wines and premium bud are striving to define their product as “craft,” warranting premium prices.

Some growers advocated for size of the operation to be a dividing line: under 1 acre or even up to 10,000 square feet of growing space.

“One of the things that for me defines ‘craft’ is that you honor the inconsistencies,” Benziger said.

“Because to me, if they're totally consistent all the time, then you're bumping up against the definition of a commodity. Every year as growers we know there's little differences of vintage, there's little differences out there of practices that you can do that can actually accentuate the inconsistencies.”

Jeff Quackenbush covers wine, construction and real estate. Before coming to the Business Journal in 1999, he wrote for Bay City News Service in San Francisco. Reach him at or 707-521-4256.

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