San Diego

San Diego Pot Industry Optimistic Despite Dip in Dispensary Sales

This week marks the first anniversary of California’s legalized recreational marijuana industry.

And while recent reports suggest the sales aren't living up to the initial hype, local dispensaries and cannabis advocates are optimistic the infant industry will grow fast.

Oz Rodriguez is the store manager and hype man at San Diego Recreational Cannabis (SDRC) in Mission Valley.

Rodriguez says he's not deterred by lagging sales across California’s recreational marijuana industry. In fact, he says the industry is shifting.

According to the cannabis business trackers BDS Analytics, legal recreational marijuana sales in California were expected to exceed $3 billion in 2018. But BDS now anticipates the final spending to be closer to $2.5 billion.

“It’s possible those expectations were a bit too high,” said Jessica McElfresh, President of the Association of Cannabis Professionals. McElfresh advocates for licensed cannabis businesses in San Diego.

While she says lack of retail stores, intense regulation and the competition of the black market have contributed to sluggish sales, it's no reason to worry.

“When we saw the rollout of adult use cannabis in the state of Washington, in the state of Colorado and to some degree in the state of Oregon, we also saw a similar transition of people getting used to regulation, of consumers getting used to taxes,” she said.

The City of San Diego brought in about $5.5 million from its cannabis business tax in 2018 and the city hopes to make $500 thousand more than expected in taxes for fiscal year 2019.

For Rodriguez, the mission in 2019 is to continue to normalize stores like his.

“People keep coming in and asking for gift cards. That's something that we don't have in place yet but believe me, soon enough we're gonna have gift cards,” he said.

Another example of that growth comes with SDRC’s plans to open two more stores in San Diego in the coming year.

Contact Us