Legal marijuana revenues are coming in “slower than anticipated,” reports Governor Jerry Brown’s May Revise budget.

The governor’s assessment follows on a May 8 update from the Legislative Analyst’s Office that estimated first-quarter revenues from marijuana excise taxes of $34 million, below the pace needed to hit the state’s goal of $175 million in revenues for the first year of legal marijuana.

“Based on this quarterly tally, we think that 2017-18 revenue likely will be somewhat lower than the administration’s January estimate,” the LAO reported.

Despite this news, there is still plenty of time for revenues to pick up the pace.

Check out our updated map showing shops licensed to sell recreational cannabis in California.

For one, licenses for state-taxed and -regulated marijuana businesses are still rolling out. Second, while many local governments have been slow to accommodate the reality of legal marijuana, it is likely that many counties and cities will be opening up as time goes on, if only to collect additional revenues.

In order to ensure California’s legalization effort works as envisioned, and facilitates greater participation in the legal market on the part of black market cultivators, sellers and consumers alike, state and local officials must be prepared to adjust taxes and regulations of marijuana accordingly.

Earlier this year, a report from the California Growers Association noted that California’s challenging tax and regulatory schemes have and likely will continue to keep out a large number of people otherwise willing to join the legal market.

Fortunately, Assemblymembers Tom Lackey, R-Palmdale, and Rob Bonta, D-Oakland, have proposed tax relief for the nascent legal marijuana industry with Assembly Bill 3157. The bill rightly recognizes the importance of keeping the legal marijuana industry competitive with the well-established black market, and we reiterate our support for it.
But local governments will have to play a role in facilitating the success of the legal market, too.

As an analysis released last month showed, fewer than one in three California cities allow any kind of marijuana business to operate.

Changing this will often come down to politicians setting aside their personal feelings about marijuana and carrying out the will of the voters.

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