Here's How Much Cash California Could Make Off of Legal Marijuana


$31 billion annually. Basically, the GDP of a small country.

This figure comes from a recent Mother Jones story which estimated that state law enforcement seized about 10% of the marijuana grown in California each year. Because almost all marijuana in the state is illegally grown (though medical marijuana was legalized in 1996, cultivation remains a felony), that percentage can be extrapolated to mean roughly 10 million plants are left growing outdoors. And based current market prices, those 10 million plants could be worth as much as $31 billion.

California's biggest crop. If these calculations are accurate, the California weed business could be bigger than the state's ten largest farm commodities combined. But the math is tricky. The $31 billion estimate speculated on the yield from a single plant, and other estimates are closer to $2 billion annually. Still, such strong estimates could be very tempting to California as it struggles to escape an economic funk that has been plaguing it for years.

Though it's been speculated that legalized marijuana could be the answer to the state's economic woes, legitimately taxed recreational sales are likely not in the Golden State's immediate future. Prescribed medicines are exempt from sales tax in California, and the public voted down a 2010 proposition aimed at taxing and regulating medical marijuana further. Currently the state allows municipalities to decide how they want to tax weed, and the sum of tax collected on legal marijuana sales in the state is negligible.

The prevalence of marijuana in California. Image Credit:

Weed is still pretty lawless. California was the first state to legalize medical use back in 1996, giving rise to a medical marijuana system in which obtaining a prescription is not very difficult. As a result, "back pain" became a rampant complaint and questionable doctors handed out medical marijuana cards like Halloween candy. Other states considering legalization often look at California as the "What not to do" example.

Will they/won't they? Since the leap forward in state-level marijuana legalization, California has fallen behind many other states, and the state's internal conflicts are slowing down its ability to cash in. In California, the market already exists, it's just unregulated. It wouldn't take many more steps to start tapping that $31 billion.