California’s Outstanding Potential to Supply Out-of-State and International Marijuana Markets

Last Updated on Aug 18, 2017

California’s potential to supply out-of-state and international marijuana markets in the future is without question.

Marijuana is becoming big business in California and several of the other states that have legalized it to one degree or another. As with most agricultural crops in the US, however, California is by far the leader in the pack when it comes to production. Producing an estimated 13.5 million pounds every year, California outproduces other states hands-down.

Some 2.5 million pounds of California’s current annual production is consumed in-state but, given the current illegality of export, the remainder will likely be channeled into the black market. An estimated 80% of the marijuana produced in California leaves the state through illegal channels . This, of course, has been the norm for decades but the supply is only increasing as more and more producers jump into the supply chain. New producers in the Central Valley and in Southern California are likely to add tons more product to the current surplus. Salinas Valley is a particularly thriving area for new cannabis producers.

In a recent New York Times article, author Thomas Fuller, describes how dilapidated greenhouses in Salinas previously used for the cut-flower business are now being converted to marijuana enterprises. Fuller describes one 47-acre farm that is currently producing marijuana legally. That same farm is expanding. Its existing greenhouses and warehouses are being retrofitted and new greenhouses are being built. Fuller claims that by next year that farm will be one of the largest marijuana producers in the world.

In short, California is poised and ready to become the largest legal supplier in the US. That can only occur, however, if federal and state laws are changed so that cannabis can be legally exported. Indeed, in the coming decades, it is easy to predict that California will dominate not just the U.S. market but also the international market. Such is the rule of supply and demand. In the short term the situation may present challenges to the state’s legal marijuana businesses. Producers offering a consistent, unique and high quality product will fair well through the coming transition.