California cannabis sales keep falling 📉

CALIFORNIA DREAMIN’
California cannabis sales keep falling 📉

Driving the news: California recorded $939 million in legal cannabis sales in the third-quarter of this year — the lowest quarterly total in more than five years, per data from the state government.

That’s 9% below last year and a whopping 25% off the peak in 2021. Overall, that makes California a less than $4 billion cannabis market. 

Zoom in: The market peaked in 2021 at nearly $6 billion annualized. 

Since then, it’s been a steady grind down as retailers close, brands consolidate, and the illicit market continues to dominate.

Why it matters: California’s market struggles aren’t caused by a lack of demand. It’s a policy and economics problem. 

High taxes, local municipal opt-outs, and the persistent illicit market are eating the legal industry’s lunch in what should be the center of the cannabis universe. And the slowed pace of federal reform hasn’t done the state’s industry any favors.

Many operators are clearly struggling to survive in the hopes the market finally rebounds. 

What’s next: Nicole Elliot, who has led California’s Department of Cannabis Control since 2021, will step down at the end of the year. She’ll be replaced by Clint Kellum, who’s held multiple positions in state government.

It’ll be interesting to see what’s next. 

There seems to be an increasing realization among lawmakers across the state that you can’t just keep ramping up cannabis taxes and expect revenue to go up along with it, after Gov. Newsom reversed a proposed 25% increase and San Francisco put off a planned increase in November. 

The illicit market will always, or at least try, to undercut on price as long as enforcement remains lax. There are always tradeoffs to policy, but hopefully policymakers can find the right balance. 

-JB

*Shoutout to Ananda Strategy’s Hirsh Jain, a reader and friend-of-the-newsletter, for sending us this data.

Hochul fires top New York cannabis regulator 🗽

Gov. Kathy Hochul on Monday asked for the resignation of New York State Office of Cannabis Management acting Executive Director Felicia Reid, who has been in the position since January of last year. Hochul’s office said the resignation was a result of how the office handled the Omnium scandal, where illicit weed ended up on store shelves. OCM Chief Administrative Officer Susan Filburn will take over.  Read more.

Michigan's new 24% cannabis tax survives legal challenge 🧑‍⚖️

A state judge denied a bid from the Michigan Cannabis Industry Association to block an impending 24% excise tax on cannabis that is set to take effect on Jan. 1. The plaintiffs failed to show the state law that legalized cannabis was the only means to apply new taxes. The new tax was approved in October as part of a larger annual funding bill with the intent of using the extra funds for road repairs. 

Dems introduce cannabis equity resolution ⚖️

Rep. Troy Carter, along with fellow Democrats Reps. Ilhan Omar, Lateefah Simon and Dina Titus introduced the Realizing Equitable & Sustainable Participation in Emerging Cannabis Trades Resolution on Dec. 4. The RESPECT Act urges states with legal cannabis markets to adopt policies that seek to undo the harms of the War on Drugs and calls upon the federal government to deschedule cannabis. 

Total cannabis sales hit $230 million in Maine 💰

Total cannabis sales in Maine are approaching a quarter-billion since the market launched in 2020. Five years in the market appears to be maturing and prices have dropped to about $6.28 per gram, as of November, according to data from the state's Office of Cannabis Policy.

LIT ALERTS’ INSIGHTS
Green Wednesday 2024 vs 2025

As cannabis continues its annual run of increasing acceptance at the Thanksgiving dinner table, Green Wednesday has solidified itself as a reliable top sales day every year.

Before Thanksgiving, Lit Alerts looked at patterns from 2024, this week it’s what changed in 2025.

Of the six markets Lit Alerts analyzed, New York, New Jersey, and Massachusetts on the East Coast and Ohio, Illinois, and Missouri in the Midwest, every market with the exception of Massachusetts experienced overall growth in terms of dollars sold on Green Wednesday.

However that doesn't tell the whole story as this overall growth wasn't specific to Green Wednesday.

These five markets' trend lines show overall growth in the full month of November when compared to 2024.

Massachusetts remained flat year over year, a sign of things to come for New York and New Jersey.

Next, they compared the sales lifts of Green Wednesday when compared to an average November sales day in 2024 versus 2025.

In 2025, the average sales lift in every market except New Jersey decreased.

Green Wednesday outperforming the rest of the month by a lower rate aligns with the trend we observed with many retailers running much deeper discounts on Green Wednesday this year in order to compete on one of the busiest days of the year.

The regional trend continued in 2025 when comparing Green Wednesday to Black Friday. In the Midwest states like Ohio, Illinois and Missouri, Green Wednesday continues to only slightly nudge out Black Friday while in the East Coast markets of New York, New Jersey and Massachusetts Black Friday usually drops off, looking more like a regular weekend day.

Have a look at Lit Alerts’ exclusive insights into 2024 and 2025 Green Wednesday. 👇

To learn more about Lit Alerts and get a special offer only available to Cultivated readers, visit litalerts.com.

Trulieve pays off $368 million in debt 💸

The Florida-based company dropped $373 million to pay off 8% senior secured notes that were due in 2026. The company used cash to pay off the notes, which were valued at $368 million, with additional costs going toward unpaid interest. $TCNNF ( ▼ 3.01% )

Aurora Cannabis named Kerry Miller as managing director of operations in Australia and New Zealand. Miller has 35 years of experience in consumer packaged goods, including 25 years at Reckitt Benckiser and almost 10 years at Unilever. $ACB ( ▼ 1.31% )

New York study correlates legalization with reduction in opioid use 💊

A study out of New York found that adults with chronic pain participating in the state’s medical cannabis program saw a 22% drop in the amount of opioids they were using over an 18-month period.

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