California cannabis sales recover from earlier slump
- California retail cannabis sales reached $1.013 billion in Q2 2026, showing slight growth compared to $1.006 billion in the same period last year and marking a stabilization after several quarters of decline.
- Sales in the four top product categories—vapes, packaged eighths of flower, infused pre-rolls, and edibles—increased marginally to 39.1 million units sold in Q2 2026 from 38.5 million units a year earlier.
- State sales tax revenue from cannabis in Q2 2026 was $261.7 million, slightly lower than the $263.9 million collected in Q2 2025, amid ongoing challenges including competition from the illicit market and effects of a repealed excise tax hike.
- Since legal sales began in January 2018, California’s cannabis market has amassed over $16 billion in cumulative retail sales, maintaining its position as the largest legal cannabis market in the U.S.
California retail cannabis sales held steady in the second quarter at $1.013 billion – only slightly more than the $1.006 billion reported for the same period a year ago, according to state data.
The slight gain suggests the state’s legal market may be finding steadier footing after several quarters of decline.
The second quarter also was an improvement over the first, when retail sales came in at $963.9 million, according to the California Department of Tax and Fee Administration.
Across the four most popular product categories – vapes, packaged eighths of flower, infused pre-rolls, and edibles – retailers reported selling 39.1 million units in the second quarter, according to the state’s Department of Cannabis Control.
That’s up slightly from the 38.5 million units sold in those product categories in the same time frame last year.
Second-quarter sales performance translated into $261.7 million in state sales tax revenue, compared to $263.9 million a year earlier.
Peak sales are well in the past. Quarterly retail sales hit $1.138 billion in the second quarter of 2023, then drifted lower through 2024 and into early 2025 with several quarters falling below $1 billion.
A since-repealed excise tax increase that went into effect July 1, 2025, may have contributed to the decline in sales. But even after the tax hike was repealed Oct. 1, fourth-quarter sales were still significantly lower than the same period a year ago, according to the CDTFA.
Exclusive industry data and analysis to help you make informed business decisions and avoid costly missteps. All the facts, none of the hype.
What you will get:
The 2026 second quarter marks the second consecutive quarter above that threshold.
California’s legal cannabis market has generated more than $16 billion in cumulative retail sales since launching in January 2018, according to CDTFA. The state remains the largest legal cannabis market in the country by retail sales volume.
Licensed cannabis stores continue to compete against a persistent illicit market that regulators and industry groups have long cited as a drag on legal retail performance.