Revenue from San Diego’s cannabis tax has been dropping sharply in recent months as the city’s two dozen dispensaries face growing competition from delivery services and new dispensaries in other nearby cities.
City officials say another factor is that several other local cities, including Chula Vista and La Mesa, have been starting to allow legal dispensaries after years of banning them. Just over a year ago, long-term estimates for cannabis tax revenue were projected at $31.5 million in fiscal year 2025, $33.3 million in fiscal 2026 and $33.8 million in fiscal 2027.
Rath said lower-priced cannabis products have been selling much better than higher-priced products in recent months, a trend he blames on inflation leaving some customers with less money to spend on cannabis. “I’m hearing from retailers that sales are down in the double digits,” he said. “It’s got to be the illegal market. People didn’t just stop consuming.”
Yes, go delivery.